Down but not out

Lodging Econometrics today released its anticipated Q3 2008 report on the U.S. hotel industry. The picture isn't pretty. It basically confirms what most of us have expected: hotel construction projects are down and scheduled starts are taking a nosedive. The report details the impact the lending crisis and the softening economy is having on developer sentiment, transaction volume and selling prices.

Among the report's highlights:

• The total construction pipeline for the U.S. stood at 5,652 projects/740,272 guestrooms as of the end of Q3. Pipeline counts are down, quarter-over-quarter, 4 percent and 6 percent, respectively.
• Declines were modest in the "under construction" and "early planning" stages. Declines were significant in the "scheduled starts in the next 12 months". A number of projects actually migrated backwards into "early planning".
• Construction starts in Q3 were down for the second quarter in a row, while cancellations and postponements of projects already in the pipeline increased for the third consecutive quarter.

However, all isn't doom and gloom. The report finds that leading hotel companies and brands in the U.S. have strong development pipelines. Including both new construction and conversions, Marriott, Hilton and InterContinental each have pipelines in excess of 100,000 rooms. Keep your fingers crossed they remain committed to these projects.