The recession is beginning to have an impact on hotel construction in the United States as the number of new hotel projects in the pipeline is declining and the number of project cancellations is increasing, according to Lodging Econometrics, Portsmouth, N.H.

The new hotel pipeline—which includes projects under construction, scheduled to start, and in the early planning stage—was down 8 percent in the first quarter of 2009 from the fourth quarter of 2008, and 16 percent from the recent peak in the second quarter of 2008. The number of new hotel rooms in the pipeline is down 21 percent from the second quarter of 2008. Scheduled starts, meaning hotel projects scheduled to start construction within 12 months, are down 23 percent since the second quarter of 2008. “The slump is a result of the rise in cancellations and postponements, which is expected to continue,” according to LE’s Q1 Construction Pipeline Summary.

While some smaller projects are still able to get financing, the economic climate has made it much more difficult for larger-scale hotel construction projects to get funding. “As a result, numerous projects are stalled as developers struggle with credit difficulties and the changing operating environment. Accelerating project cancellations are now reaching the highest level LE has ever recorded,” states the report.

LE reports 257 starts in the first quarter of 2009, down from 279 in the fourth quarter of 2008, 403 in the third quarter, and 381 in the second quarter. The downward trend is expected to continue into 2010. Further, 573 hotel projects were canceled or postponed in the first quarter of 2009, up from 410 in the fourth quarter of last year, 360 in the third quarter, and 326 in the second quarter. New project announcements are also down. There were 425 new projects announced in the first quarter, down from 873 in the first quarter of 2008.

For more information, go to the Lodging Econometrics Web site.