Select-Service Hotel Projects Account for 369,367 Rooms 0r 63 Percent in the Total U.S. Development Pipeline.

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Construction Pipeline U.S.

Select-service projects account for 369,367 rooms or 63% of the total U.S. hotel development pipeline, according to STR’s AM:PM platform. While the select-service label can be placed on projects within a number of chain scales, STR focused its analysis of growth in the sector on the Upper Midscale and Upscale chain scales.

Select-service projects account for 369,367 rooms or 63% of the total U.S. hotel development pipeline, according to STR’s AM:PM platform. 

While the select-service label can be placed on projects within a number of chain scales, STR focused its analysis of growth in the sector on the Upper Midscale and Upscale chain scales. 

“Select-service brands were once a modest proportion of the hotel supply pipeline, averaging around a quarter of all development in the early 2000s,” said Alex Robinson, STR’s senior manager, industry partners. “However, since the global financial crisis, that proportion has grown to more than 60%. That is a strong indicator that owners and developers favor the cost efficiency of select-service brands. With increasing labor and construction costs, select-service brands present an opportunity to boost profit margins, while also meeting the evolving needs of the guests who may value external venues and self-service.” 

As of STR’s March reports, which reflect information as of the end of February, the Upper Midscale segment accounted for 1,989 projects and 199,467 rooms across the In Construction, Final Planning and Planning phases. Upscale chains totaled 1,322 projects and 169,900 rooms in those same stages of the supply pipeline.  

  2004 2006 2008 2010 2012 2014 2016 2018
Total Pipeline 273,651 517,712 612,892 317,343 304,077 412,878 560,199 588,240
Select Service 83,988 232,332 358,035 191,836 187,305 241,032 337,821 369,367
% of total 31% 45% 58% 60% 56% 58% 60% 63%

Source: STR / number of rooms in In Construction, Final Planning and Planning phases / 2004-16 data as of year-end, 2018 data as of February

The AM:PM platform, previously only available in the U.K. and Ireland, was just recently launched in the U.S. Top 25 Markets. The evolution to select-service brands is reflected in several major markets around the country. 

Houston, Texas, was 48% select-service in 2004, as high as 84% in 2010, and 67% currently. Dallas, Texas, is 55% select-service currently—that is down from the market’s proportion in 2016 (61%) but up dramatically from 2004 (25%). Orlando, Florida, was 11% select-service in 2004, but is up to 52% currently. New York, New York, the country’s most active hotel development market, was at 34% in 2004, but is now at 49%. Las Vegas, Nevada, reported just 5% of its pipeline in the select-service chains in 2006. Currently, the market is at 29%. 

STR provides clients from multiple market sectors with premium, global data benchmarking, analytics and marketplace insights. Founded in 1985, STR maintains a presence in 10 countries around the world with a corporate North American headquarters in Hendersonville, Tennessee, and an international headquarters in London, England. For more information, please visit str.com.