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New York City is the top markets for both the number of new rooms under construction and the number of new hotel projects.
Developers now have 11,000 new hotel rooms under construction in New York City, according to research firm CoStar. That makes New York the busiest city in the U.S. for new hotel room construction, a position it has held for several years.
“Throughout this real estate cycle, New York has been the leader,” says Jeff Myers, managing consultant for CoStar Portfolio Strategy. “The overall economy is positioned to support demand for hotel rooms.”
About 70 million visitors came to New York in 2017, and a similar number of people are expected to visit the city in 2018. That means that even though hotel developers have been very busy here, new hotel rooms keep filling up with guests.
“It is surprising that this level of supply growth has gone on as long as it has,” says STR’s Bowers. STR counts 83 new hotel projects now under construction in New York City. That makes it the market with the largest number of new hotel projects underway in the United States.
A diverse economy has added 500,000 new jobs to Dallas in the last five years. “The economy is consistently among the fastest-growing in the country,” says Jeff Myers.
The strong economy is attracting developers, who have 5,300 new hotel rooms under construction here, according to CoStar. That makes Dallas the third busiest market for new hotel development.
For example, one the largest hotel projects in the city is a new, 300-room Hyatt Regency hotel, which is within a mile of new corporate campuses for J.P. Morgan Chase and Toyota, each with more than a million sq. ft. of space.
“The market has seen a pretty good amount of supply, but demand has held up well,” says Bowers.
Six million people visited Las Vegas in 2017 to attend conventions. That’s a record for the city, which is on track to at least match that number of visitors this year.
That’s one reason developers have 7,400 hotel room under construction in Las Vegas, according to CoStar. That makes it the second busiest city in the country for new development. The two largest new resort hotels under construction total 3,000 rooms.
Denver has one of the lowest unemployment rates in the U.S. and booming demand for hotel rooms, for visitors to casinos and conventions. That has drawn developers, who have 4,100 new hotel rooms under construction in the market, according to CoStar.
That includes giant projects like the Gaylord Rockies convention resort hotel, which will bring 1,500 new rooms to the eastern suburbs of Denver, and a Monarch Black Hawk casino hotel, which will bring 500 new room to the western side of the market.
Developers have 3,500 new hotel rooms under construction in Nashville. That makes it the fifth busiest market for hotel development in the country, according to CoStar.
That includes three projects with more than 400 rooms near a new convention center in downtown Nashville. “They are taking advantage of the economic growth in Nashville and the new infrastructure,” says Myers.
Developers have 43 new hotel projects under construction in Houston. That’s more new construction projects that any other market except for New York City, according to STR. The projects, however, are relatively small, with fewer rooms.
These hotel projects may suffer from weak demand for hotel rooms, as the energy business in Houston as sill not recovered. “The construction boom got going when oil was really hot,” says Bowers. “They are probably going to face an environment that is very challenging.”
A strong economy and strong demand for hotel rooms has drawn developers to Miami, where they have 27 new hotel projects under construction. That makes Miami the market with the fourth largest number of new hotel projects underway, after New York, Houston and Dallas, according to STR.
Developers continue to build new hotels in Washington, D.C. “It’s a good market that you want to be in for the long term,” says Bowers.
Developers have 21 new hotel projects under construction. That makes Washington the market with the fifth largest number of new hotel projects underway, after New York, Houston, Dallas and Miami, according to STR.
