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Hotel Construction Spending Filling Industry Vacancies

Hotel spending is leading all non-residential construction categories by a wide margin, as architecture and construction firms ramp up activity on new builds and renovation projects. Owners catching up on property improvements are planning renovations to areas like lighting systems, power, mechanicals and guest-facing areas.

Spending in the hotel industry was up to $15.2 billion through July, an increase of nearly 30 percent, American Institute of Architects chief economist Kermit Baker said during a recent Reed Construction Data webinar. The increase far outpaced the other commercial/industrial sectors of commercial (+1.6 percent), manufacturing (+0.2 percent) and office (-2.1 percent), Baker said, quoting Census Bureau data.

Baker said architecture firms are slowly building their project backlog levels, a sign that more work is coming in, according to a report from Hotel News Now. The AIA's Architecture Billings Index for September registered a 54.3. Scores higher than 50 indicate billings growth.

"Design activity is clearly pointing to an uptick in construction activity," Baker said.

There were a total of 2,767 projects in the in construction, final planning or planning stages as of September, comprising 333,775 total rooms, according to data from hotel industry analysis firm STR Global.

A growing concern is finding skilled labor and planning for projects, said Samuel Cicero, Jr., president of Cicero's Development Corporation. "It takes six months to a year from the time you start planning to the time you start working in the building."

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December 7, 2019, 4:50 am PDT

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