Hotel & Motel Management - February 2009 - (Page 22) H&MM February 2009 | HotelWorldNetwork.com 22 Trends & Stats BY PATRICK FORD “Long delays are expected until the financing environment improves.” Key metrics: Under construction 280 Rooms (000s) 210 140 70 0 Q3 2007 1,322 Q4 2007 1,523 Q1 2008 1,350 Q2 2008 1,073 Q3 2008 772 234.4 247.0 211.9 177.2 113.9 ipeline growth has concluded for this cycle and turned downward. Lending has been mostly unavailable, with larger project development in major cities, financial centers and resort areas seeing the most significant impact. Smaller to midsize project development also has been affected, but to a lesser degree, as some of these TAKEAWAY projects were able to New project announcements are find funding. However, down, but openings loan amounts are less are up. and terms are far more restrictive. Another factor contributing to pipeline declines is new hotel openings, which will be at decade highs in 2009-10. Lagging economy sets pace for pipeline declines P pipeline were at 843 projects/121,068 rooms in Q3 2008 and have declined 57 percent by projects and 71 percent by rooms from Q4 2007’s cyclical peak. Many developers have moved to the sidelines to wait for the economy to rebound, lending to return and consumer confidence and business profitability to improve. Projects Three-year forecast for openings In Q1-Q3 2008, 2,116 hotels/296,797 rooms came online as new supply. A further 534 hotels/63,614 rooms were anticipated for Q4. New openings are expected to reach a cyclical high in the next two years, as projects that were able to secure financing before lending closed down begin to come online. Lodging Econometrics expects 2,804 hotels/425,615 rooms to open in 2009, and a further 2,664 hotels/447,364 rooms in 2010. While at cyclical highs, new openings should not be viewed as excessive or the result of overbuilding. They appear problematic, largely because room demand growth has trended negative, which is a rarity, and is causing room rates to decline. LE’s forecast is based on trends as of the end of Q3 2008 and does not account for other unforeseen changes. hmm@questex.com Patrick Ford is president of Lodging Econometrics and a veteran voice of the lodging industry. He can be reached at pford@lodgingeconometrics.com. Key metrics: Cancellations 140 Rooms (000s) 105 81.8 90.5 72.2 47.7 130.6 70 35 0 Q3 2007 360 Q4 2007 353 Key pipeline metrics At the end of Q3 2008, construction starts, at 772 projects/113,947 rooms, were less than half of what they were at Q4 2007’s peak. Projects were stalled in the scheduled starts and early planning stages, as the lack of financing created a drag on migration up the pipeline. Long delays are expected until the financing environment improves. Since the cyclical low in Q4 2007, cancellations have doubled, with Q3 2008 at 751 projects/130,614 rooms. For the more marginal projects already in the pipeline, cancellations are accelerating as operating performance now joins financing and lending as major developer concerns. New project announcements in the Q3 2008 construction pipeline by stage Total pipeline Region United States Canada Caribbean, Mexico, Central America South America Europe Middle East Africa Asia Pacific Total pipeline Projects 5,652 231 308 332 952 541 163 1,990 10,169 Rooms 740,272 29,517 58,771 54,734 164,577 159,690 33,800 466,456 1,707,817 Projects Q1 2008 420 Q2 2008 541 Q3 2008 751 Key metrics: New project announcements 440 370.1 416.4 296.6 189.8 121.1 Rooms (000s) 330 220 110 0 Q3 2007 1,679 Q4 2007 1,954 Projects Q1 2008 1,547 Q2 2008 1,258 Q3 2008 843 Global construction pipeline total projects Under Construction Projects Rooms 1,716 83 167 212 519 263 88 1,233 4,281 233,407 10,997 34,346 32,750 90,301 74,954 19,995 302,210 798,960 Starts over next 12 months Projects Rooms 2,543 83 91 67 232 145 49 269 3,479 303,172 10,426 16,392 15,067 41,165 39,967 8,785 69,399 504,373 Early planning Projects Rooms 1,393 65 50 53 201 133 26 488 2,409 203,693 8,094 9,205 10,182 10,736 10,781 10,169 Early planning Starts over next 12 months Under construction 8,033 6,917 33,111 44,769 5,020 94,847 404,484 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 © 2009 Lodging Econometrics http://www.HotelWorldNetwork.com
Table of Contents Feed for the Digital Edition of Hotel & Motel Management - February 2009 Hotel & Motel Management - February 2009 Contents Staff Management is Key for Smaller Budgets Perspective Guests Expect More from Green Programs Sales Clinic Legally Speaking HotelWorld Update Consultant's Corner Trends & Stats Laundry Investing Requires Return to Fundamentals Limited-Service Hotel-Chains Energy Management Ice Machines Broadband Marketplace Ad/Editorial Index Checking Out Hotel & Motel Management - February 2009 Hotel & Motel Management - February 2009 - Hotel & Motel Management - February 2009 (Page 1) Hotel & Motel Management - February 2009 - Hotel & Motel Management - February 2009 (Page 2) Hotel & Motel Management - February 2009 - Contents (Page 3) Hotel & Motel Management - February 2009 - Staff Management is Key for Smaller Budgets (Page 4) Hotel & Motel Management - February 2009 - Staff Management is Key for Smaller Budgets (Page 5) Hotel & Motel Management - February 2009 - Perspective (Page 6) Hotel & Motel Management - February 2009 - Perspective (Page 7) Hotel & Motel Management - February 2009 - Guests Expect More from Green Programs (Page 8) Hotel & Motel Management - February 2009 - Guests Expect More from Green Programs (Page 9) Hotel & Motel Management - February 2009 - Sales Clinic (Page 10) Hotel & Motel Management - February 2009 - Sales Clinic (Page 11) Hotel & Motel Management - February 2009 - Legally Speaking (Page 12) Hotel & Motel Management - February 2009 - Legally Speaking (Page 13) Hotel & Motel Management - February 2009 - HotelWorld Update (Page 14) Hotel & Motel Management - February 2009 - HotelWorld Update (Page 15) Hotel & Motel Management - February 2009 - Consultant's Corner (Page 16) Hotel & Motel Management - February 2009 - Consultant's Corner (Page 17) Hotel & Motel Management - February 2009 - Trends & Stats (Page 18) Hotel & Motel Management - February 2009 - Trends & Stats (Page 19) Hotel & Motel Management - February 2009 - Laundry (Page 20) Hotel & Motel Management - February 2009 - Laundry (Page 21) Hotel & Motel Management - February 2009 - Laundry (Page 22) Hotel & Motel Management - February 2009 - Laundry (Page 23) Hotel & Motel Management - February 2009 - Investing Requires Return to Fundamentals (Page 24) Hotel & Motel Management - February 2009 - Investing Requires Return to Fundamentals (Page 25) Hotel & Motel Management - February 2009 - Limited-Service Hotel-Chains (Page 26) Hotel & Motel Management - February 2009 - Limited-Service Hotel-Chains (Page 27) Hotel & Motel Management - February 2009 - Limited-Service Hotel-Chains (Page 28) Hotel & Motel Management - February 2009 - Limited-Service Hotel-Chains (Page 29) Hotel & Motel Management - February 2009 - Energy Management (Page 30) Hotel & Motel Management - February 2009 - Energy Management (Page 31) Hotel & Motel Management - February 2009 - Ice Machines (Page 32) Hotel & Motel Management - February 2009 - Ice Machines (Page 33) Hotel & Motel Management - February 2009 - Broadband (Page 34) Hotel & Motel Management - February 2009 - Broadband (Page 35) Hotel & Motel Management - February 2009 - Broadband (Page 36) Hotel & Motel Management - February 2009 - Broadband (Page 37) Hotel & Motel Management - February 2009 - Marketplace (Page 38) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 39) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 40) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 41) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 42) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 43) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 44) Hotel & Motel Management - February 2009 - Ad/Editorial Index (Page 45) Hotel & Motel Management - February 2009 - Checking Out (Page 46) Hotel & Motel Management - February 2009 - Checking Out (Page 47) Hotel & Motel Management - February 2009 - Checking Out (Page 48)
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