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Hospitality Industry and Modular Construction Forecasts are Encouraging

With 2019 well underway, national and market-level hospitality forecasters are already looking to 2020 and beyond. Given SurePods’ close involvement in this key market, we’re continually keeping our finger on the pulse of lodging trends.

In January 2019, STR and Tourism Economics “downgraded their 2019 forecast for the U.S. hotel industry, now pegging year-over-year demand growth at 1.9 percent, compared to prior guidance that projected 2019 growth to hit 2 percent. This is the second consecutive downgrade in the 2019 outlook since August,” according to Business Travel News. However, based on first quarter metrics, CBRE found that “Occupancy for the year is now projected to increase slightly, the 10th consecutive annual rise.”

Backing this trend, Lodging reports that “A favorable economic outlook will lead to continued growth in U.S. hotel revenues and profits through 2020.” The article then goes on to quote R. Mark Woodworth, senior managing director of CBRE Hotels Americas Research: “For the most part, the supply of hotel rooms entering the market will be absorbed by newly generated demand buoyed by a healthy economy. Further, while the nominal rate of change may be disappointing, we are projecting average daily rate (ADR) growth above the pace of inflation for 2019 and 2020.”

While the outlook is modestly positive, opportunities abound for those willing to employ creative measures to leverage this busy economy. In fact, one hotel chain had quite the first quarter in 2019, and is on pace to continue performing strongly. Hotel Management recently wrote that “Hilton’s all-suites brands—Embassy Suites, Homewood Suites and Home2 Suites—had a strong start in Q1, opening 21 properties and signing deals for 37 more and remains on track to open 130 by year’s end. In all, the Hilton’s brands have nearly 1,050 open properties and a pipeline of close to 600.”

The article further includes Dianna Vaughan, global head/SVP, All Suites Brands by Hilton’s insights: “By utilizing everything from adaptive reuse to multi-brand builds to modular construction, we’ve been able to grow in various markets, including traditionally high-barrier-to-entry urban city centers, both in North America and beyond.”

Hotels and resorts like Hilton have long been proponents of the pre-fab approach, looking to factory-built solutions like SurePods’ modular bathroom pods to shorten construction schedules in an increasingly tight labor market. Take, for example:

  1. Hilton Embassy Suites Seattle, who trimmed their construction schedule with SurePods despite Seattle’s tight market for skilled labor

  2. Hilton Garden Inn Homewood Suites Calgary, who shaved months off their hospitality project plan by incorporating SurePods

  3. Hilton Garden Inn Devens, who used SurePods to accelerate their construction schedule

And Hilton isn’t the only one utilizing prefabrication. Financial Planning estimates that “The global modular construction for high-rise buildings market is expected to grow at 5.60% CAGR during the forecast period, 2017-2023.”

And contact us to talk about your next project. You can email us at [email protected], and we’ll get right back to you.


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