Excerpt from CoStar
Survey Shows Delayed Projects Boosted 2021 Numbers to Record High
A survey of 2021 California hotel development shows the state had a record year for new rooms opening, but most of those were delayed from 2020.
California's hotel industry had a record year for new guestroom openings in 2021, signaling a rebound in development from pandemic-era lows.
According to the California Hotel Development Survey 2021 Year-End from Atlas Hospitality Group, 12,027 new guestrooms opened in California last year, beating out 2019’s record 11,795. Eighty-eight hotels opened last year, second only to 2019’s 92.
There’s a slight twist, however, in the record-setting rooms number. Many hotel developers who had completed their new projects or nearly completed them in 2020 held off until the next year to finish and open them, Atlas Hospitality President Alan Reay said.
“Truth be told, it would not be a record year if we were in a non-COVID year,” he said. “There was an incredible amount of product that opened up in the first quarter of 2021 just because it was it was delayed from 2020.”
The survey shows that in 2020, 66 hotels with 7,179 rooms opened in California. Though down from record highs in 2019, it exceeded the 52 hotels that opened in 2018 with 6,592 rooms. The previous record development year was 2017 with 66 new hotels and 10,793 rooms opened.
By the end 2021, California had 121 hotels under construction with 15,338 rooms, according to the survey. There are 1,250 hotels in the planning phase, representing 164,352 rooms.
Development Trends
Anaheim led the state again with the largest hotel to open: the 613-room Westin Anaheim Resort, according to the survey. In 2020, the 466-room JW Marriott Anaheim opened in the city.
Los Angeles County had the most hotels open with 21 and the most rooms open with 3,249. It also led the state with 26 hotels under construction, representing about 3,700 rooms.
“LA County accounts for 25% at the market,” Reay said. “It’s such a big driver.”
The majority of hotels that opened in California in 2021 were higher-end, limited-service properties, under such brands as Residence Inn, SpringHill Suites and Hilton Garden Inn, he said. Marriott International-branded hotels led the state in guestroom openings with 3,886 rooms. The company also led in development with 34 properties under construction, totaling 4,797 rooms.
Reay said development of a full-service hotel could take at least 36 months, which means the opening could be timed with a full recovery of hotel demand.
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