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NYC leads the US markets with the largest hotel construction at 187 projects in the pipeline, according to data from Lodging Econometrics.
Houston (169 projects), Dallas (128), LA (94) and newcomer Nashville (89) round out the top five markets for hotel construction in the pipeline.
Marriott—set to be the largest hotel company in the world, after its Starwood merger—has the most projects in the pipeline for four of these five markets, being beaten only in Houston, where InterContinental Hotels Group has 46 projects.
Hotel construction pushed down occupancy rates in Q1 ’16, according to STR, and—as Bisnow reported earlier this week—the annual occupancy rate for both 2016 and 2017 is expected to decline as supply increases outpace demand growth, CBRE's June 2016 edition of Hotel Horizons shows.
This is especially true for NYC, where the number of projects in the pipeline puts $3.86B in CMBS at greater risk of default—when new risk retention requirements and the maturity wall already pose threats to the CMBS market.
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