Hotel Developers Continue to Open New Sites Despite Brutal Market Conditions
Despite the well-documented plummet in demand for hotel rooms that has only partially recovered from the lows at the height of worldwide COVID-19 precipitated lockdowns, developers are continuing to bring new projects online.
It’s a difficult time to operate any hotel—let alone open a new one. Just 48.6 percent of hotel rooms were occupied in August 2020, according to data from STR Inc. That’s down sharply from 71.2 percent the year before. However, as low as the occupancy rate was for hotels in August, it’s much better than the low of just 24.4 percent in April.
The problem is that the pipeline for hotel rooms was chock full of projects before the pandemic hit. Developers had 217,000 new hotel rooms under construction in September 2020, according to STR. That’s up from 215,000 at end of June 2020 and 202,000 this time a year ago