What's Ahead for Hotel & Resort Construction

Post by 
Stan Sarandi
November 1, 2020

s the COVID-19 crisis continues, many wonder what the future of hospitality construction might look like. While budgetary and supply line issues are certainly a reality, new construction and renovations are still underway and new projects remain in the pipeline. Yes, this is still a difficult and uncertain time, but the hotel construction industry is moving forward; and there are new opportunities for developers and contractors who are engaging in creative problem-solving.

Here what is happening and what's on the horizon:

  • New Construction: An article in Hotel Business Weekly, published July 29, 2020, states: “At the close of the second quarter of 2020, the total U.S. hotel construction pipeline stands at 5,582 projects and 687,801 rooms, down just 1 percent by hotels and rooms year-over-year, according to the latest report from analysts at Lodging Econometrics.”  It goes on to state: “Despite some project cancellations, postponements and delays, there has been minimal impact on the U.S. construction pipeline. Contrary to what is being experienced with hotel operations, the report said, the pipeline remains robust as interest rates are at all-time lows.”  While it’s hard to predict the future, at least for now new construction continues to move forward.
  • Renovations: Where funding allows, it is generally agreed that this is an ideal time for properties to take advantage of lower occupancy to move forward with renovations and rebranding. In fact, in the same article by Hotel Business weekly, they state: “In the second quarter of 2020, LE (Lodging Econometrics) recorded a combined renovation and conversion total of 1,276 active projects, with 217,865 rooms for the U.S.”
  • Time to be Creative: An article published by ConstructionDive on July 30, 2020, states: “Architecture firm Leo A. Daly's white paper states that hotel owners and developers will put a greater emphasis on health-related features such as high-performance ventilation systems, indoor/outdoor architecture and antimicrobial finishes to heighten guests' wellbeing and safety.”  It goes on to state; “This shift to health and wellness offerings will generate an influx of new and retrofit work for U.S. contractors in the near future, co-author Mark Pratt, vice president and global hospitality practice leader at Leo A Daly, told Construction Dive.”  The rest of the article elaborates on the specific types of health-related features that will likely be involved.  The key for contractors is that they can expect to have a lot of construction opportunities as properties begin to add health-related features and they are encouraged to be proactive in their planning as to how they can best prepare to bring the greatest value to the hospitality industry. We encourage you to read the entire article here.

While some within the industry believe that we won’t return to pre-COVID-19 levels until 2024, as of this writing, however, the travel industry is opening up and construction is moving forward…perhaps not at the pace that we would prefer, but the forward progress is encouraging.

Additional Sources:



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