Morrissey Goodale reports on market changes and updates for the hotel and lodging industry.
Morrissey Goodale reports on market changes and updates for the hotel and lodging industry.
Overview
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The lodging category of construction includes hotels, motels, resort lodging, tourist courts, cabins and similar facilities. Almost 98% of these structures are privately owned.
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Based on 2022 data from the U.S. Census Bureau, the lodging category represents about 2% of total nonresidential construction.
Market Size
Based on 2022 value of construction put in place from the U.S. Census Bureau, the lodging market is valued at $18.6 billion.
Hot Spots
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The hotel industry was severely impacted by the COVID pandemic. The category saw the sharpest decline in construction spending in 2020, dropping 15% from a record $33.5 billion in 2019. In 2021 it took an even worse hit, falling 36%.
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Although 2022 construction spending was still well below 2019 levels, there was a 2% year-over-year increase in design and construction spending in lodging structures. As of this past May, spending is up 29% compared to the same period last year, and construction starts are forecasted to be up 22% by the end of 2023.
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Despite the decrease in corporate travel caused by the prevalence of remote work, leisure travel has recovered and is booming this summer. Nonetheless, some hospitality projects may end up not being executed or completed due to the current economic environment with higher interest rates, tighter borrowing standards and hotel staffing shortages.
– Morrissey Goodale is a CFE Media and Technology content partner.
