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Hotel Industry Expanding07-27-15 | News

Hotel Industry Expanding

A new report shows the hotel industry has 11.1 percent more rooms "under contract" and another 20.9 percent rooms "under construction" in the month of June, both on a year-to-year basis.

The hotel industry will soon be expanding by more than a half-million new rooms, a trend being driven in large part by top-tier establishments.

A total of 426,043 rooms are listed as "under contract" in the June STR Pipeline Report. This is an increase of 11.1 percent, compared to June 2014.

Another 128,734 rooms are currently "under construction," a jump of 20.9 percent, also on a year-to-year basis. STR is a leading provider of information services and research to the hotel industry, and its data shows "luxury" and "upper upscale" hotels are fueling a good deal of this upswing.

Luxury hotels have 5,468 new rooms under construction, a jump of 57.3 percent, and another 10,716 rooms under contract, a hike of 46.5 percent, both on an annual basis.

Upper upscale hotels have 13,484 rooms under construction and another 34,124 rooms under contract. These are 30.8 percent and 30.5 percent better, respectively, year-to-year.

STR also maintains a category called "upscale." These hotels have 46,878 rooms under construction, an increase of 16.1 percent, and another 126,933 rooms under contract, a hike of 24.3 percent.

Another group called "upper midscale" has 38,859 rooms being built, a rise of 24 percent, and 139,934 rooms under contract, an improvement of 22.4 percent.

But the numbers start tailing off in the last three categories: "Midscale," "Economy" and "Unaffiliated." Midscale's rooms under construction decreased 13.6 percent in June, while its rooms under contract climbed 15.2 percent. Economy hotels saw its rooms under construction increase by 17 percent, but its rooms under contract dropped 13 percent. Unaffiliated's rooms under construction went up 23 percent, but its rooms under contract declined 21 percent.