Hotel construction is at a relative-standstill as lenders continue to tighten their belts to ward off further commercial real estate losses, according to a revised 2010 forecast from Lodging Econometrics. The research firm now predicts the opening of just 717 hotels with 82,620 rooms this year, 56 percent fewer than in 2009. In October, Lodging Econometrics had predicted 988 new hotel openings for 2010, but “the near-disappearance of lending” has led to a historically high number of project cancellations and postponements. In the fourth quarter of 2009, there were 767 hotel projects under construction — the lowest level in more than four years — and that number is expected to fall further still. Meanwhile, construction starts totaled 119 projects during the quarter, the lowest since the beginning of 2002. Though the drop-off in new hotel developments is bad news for the construction industry, hotel owners may breathe a sigh of relief as there will be fewer rooms than previously expected to absorb the increase in business and leisure travel. Smith Travel Research recently reported that close to 100 new hotels are slated to open in major U.S. cities this year. Other new additions to the market include Marriott’s new Singer Island timeshare, Oceana Palms — the Palm Beaches, which debuted earlier this month. TRD

The hotel development sector is feeling the impact of the ongoing credit crunch, with new project announcements falling to their lowest level in nearly five years and cancellations or postponements continuing to rise in the third quarter, according to a Lodging Econometrics report released today. A lack of funding for projects has contributed to the presence of fewer new hotels in the construction pipeline, which is down to 3,890 projects overall, a three-year low. After 1,032 new hotels opened in the first three quarters of 2009, 355 projects with 41,804 rooms are slated to open during the remainder of the year. The report predicts 988 hotel projects, amounting to 112,684 new rooms, will open in 2010, a 10 percent decrease from Lodging Econometrics’ previous forecast for next year. The fall can likely be attributed to expected postponements and cancellations, and to difficulties in securing loans, especially for relatively small projects, Lodging Econometrics said. TRD

South Florida’s construction pipeline was down more than 50 percent
year-over-year in May, according to a report from McGraw-Hill.
Construction contracts currently stand at $1.2 billion, a drop from
$2.6 billion in 2008. Residential building contracts, for single-family
homes, duplexes and apartments, fell 54 percent in Miami-Dade, Broward
and Palm Beach counties. Non-residential contracts, for commercial,
manufacturing, education, religious, administrative and other types of
projects, plunged 63 percent, according to the report. [more]