Contact Us

US Hotels Are Hurting From Over Construction, But Experts Say There’s No Bubble


Hotel supply has continued to rise this year, weighing down the industry as we experience the sector’s slowest quarter since 2009.

That’s according to data and research firm STR, which says Q3 hotel occupancy rates were flat compared to last year’s 71.1%, while average daily rates grew by 3.4% to $127.19, Trepp reports. And hotel construction isn’t expected to slow down anytime soon—Lodging Econometrics expects 841 hotels with over 95,000 rooms to open in the US this year, a full 16% more than last year, with the trend continuing for at least two more years.

At the same time demand for rooms is weakening, with markets like NYC feeling the pinch more than most. While CBRE analysts admit the market is hurting, largely from over construction, they insist we’re not in a bubble and say there are still pockets of opportunity in the sector, especially around airports. [Trepp]