Nashville hotel construction increases amid national stagnation

As hotel construction declines or stays flat across the nation, Nashville is among three cities where building has increased.

In Nashville, 5,028 rooms were under construction at 33 hotels, a 48 percent increase from the same period last year. It was the only market to increase construction in December, according to data from Hendersonville-based hotel analytics firm STR.

► More: Inside Noelle, Nashville's new boutique hotel

New York saw more than 12,000 rooms being built at 69 hotels, and in Dallas, 5,700 rooms were added to 45 hotels, but both markets dropped more than 18 percent from the previous year.

In Davidson County, hotels include 28,300 rooms, and 15 hotels are expected to open in Nashville in 2018, according to the Nashville Convention and Visitors Corp. More than 85 hotel properties with more than 15,000 rooms are in all phases of planning and construction, although not all are likely to be carried out.

► More: The top 10 luxury hotels in Tennessee

Butch Spyridon, CEO of the visitors corporation, has said the building of new hotels could exceed demand, weighing on the city's occupancy rates.

"That’s an exorbitant number of new rooms," Spyridon said in December. "We have to work to fill every one of those rooms."

► More: New Franklin hotels on horizon could help meet tourism demand

Nationally, nearly 180,000 hotel rooms were under construction at 1,400 hotels in December, down nearly 4 percent from the same period in 2016, according to STR. The decline was the largest year-over-year decline since 2011. November and October growth was flat, representing a trend of stagnation or decline.

“A construction decline obviously bodes well for the current industry cycle," said Jan Freitag, STR’s senior vice president of lodging insights. "It appears that financing is becoming harder to obtain, and if demand growth holds, occupancy will not deteriorate as quickly or as much as anticipated.”

Reach Jamie McGee at 615-259-8071 and on Twitter @JamieMcGee_.