Tight financing in U.S. markets forces drop in hotel construction

Posted on 14. Oct, 2010 by Kat Schneider Fotheringham in Blog, Business Travel, Uncategorized, corporate housing, executive accommodations, international business travel

This may be shaping up to become the year where corporate housing rebounded and grew stronger than ever.  The combination of a changing economy and shifts in the hotel industry may be conspiring to provide corporate housing professionals with a fresh outlook and a big opportunity for growth.

The number of rooms in the U.S. hotel industry’s active pipeline declined 21.9 percent year over year through this September, though construction activity remained vigorous in a few key business travel markets, according to Smith Travel Research data released this week.

The U.S. pipeline stood at 3,362 projects, totaling 352,356 rooms, in September, according to STR. The report went on to say that tight financing and barriers to entry in major markets has kept the pipeline numbers down compared with 2009 levels.

New York is the single exception, with the most rooms under construction of any market in the United States.  In total, those rooms will boost New York’s hotel supply by 7.4 percent once they open.

Other cities with more rooms under construction than last year include Orlando, Boston and Denver. Las Vegas saw the largest decrease in rooms under construction, down 85 percent from September 2009 levels to 1,025 rooms.

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2 Responses to “Tight financing in U.S. markets forces drop in hotel construction”

  1. AscensionCorporateRentals.com 21 October 2010 at 9:44 am #

    I also see the tight loan market making many would be owners into renters because they cannot get a loan until they can clean up their credit. Some renters are moving home with parents or doubling up with room mates to reduce expenses. Over all, this is creating less movement in the market of long term rentals. Short term leases appear to be on the rise, but more and more owners are pushing their units from long term into short term by furnishing and upgrading.
    I enjoyed your posts. Do you mind if I repost this one on my own blog at http://AscensionCorporateRentals.com/news-and-comments/

  2. Kat Schneider Fotheringham 21 October 2010 at 9:48 am #

    I do not mind at all! Thanks so much for asking in advance. So, I’m assuming you’re benefiting from the shift in the market, due to the tight loan market. Is your shortest term 30 days?


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