Hotel Openings Should Continue to Decline in 2011 and 2012

 New hotel openings likely will bottom out over the next three years, according to Lodging Econometrics' 2011 Outlook for United States Lodging Real Estate Trends. The company is forecasting cyclical lows of just 446 openings in 2011, followed by 487 in 2012. That's on the heels of 635 new openings in 2010, preceded by 1,316 in 2009 and 1,341 in 2008. According to the report, many developers concluded at the end of last year that development conditions would not change materially in the coming year, and as a result pushed back many projects previously scheduled to start in the next 12 months. In fact, projects designated as "scheduled starts" decreased by 15 percent quarter-over-quarter at the end of 2010. Additionally, new project announcements are at a low not seen since 2004, according to the report. As demand is expected to increase over the next two years, the exceptionally low increases in supply are expected to contribute to higher room rates.