"It's a dead-center hit," Patrick Ford, president of Portsmouth,NH-based Lodging Econometrics, tells GlobeSt.com. "The creditcrisis and softening lodging operating statistics are having anadverse impact on developers' thinking."

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As of the third quarter, Lodging Econometrics counts 5,652projects totaling 740,272 rooms in its US hotel pipeline. The firmnotes that construction starts were down for a second consecutivequarter and that many projects have slid back from scheduled startsover the next 12 months into "early planning" status.

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Construction starts have declined during the year to roughly 400projects nationwide through the third quarter, while cancellationsand postponements jumped to 360 between July and September,according to Lodging Econometrics data. The number of new projectannouncements for the quarter totaled 429, roughly half of thoseannounced in the third quarter of 2007.

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Lodging Econometrics' figures are in line with other industryestimates. The latest Smith Travel Research/Dodge ConstructionPipeline Report includes 5,926 hotels comprising 654,590 guestrooms through September, excluding projects in the pre-planningstage in which architects or engineers have not been hired.

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Hotel construction in the nation's largest markets has slowedduring the past year, by as much as 13% overall, according to DuaneVinson, VP of content management for Smith Travel Research inHendersonville, TN. "A prolonged recession could mean a highernumber of hotel projects moving into deferral or full abandonment,"Vinson stated in last month's report.

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New York City has one of the largest hotel pipelines among majorUS markets, though a new report by CB Richard Ellis states thatconstruction of new rooms is overestimated by 30% through 2010.Approximately 70 properties will supply 11,000 new rooms toManhattan over the next two years.

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"Manhattan's incredibly robust hotel market should not besignificantly impacted by new hotel supply," says Bradley Burwell,senior associate with CBRE Hotels. He adds that new supplyconstriction over the next two to three years will allow hotels inthe market to realize substantial top-line growth.

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Other markets with large hotel pipelines, exceeding 20% ofcurrent guestroom counts, include Phoenix, San Antonio, Houston,Washington and Philadelphia, Lodging Econometrics states. Atlantaand Dallas will see significant additions next year, while Chicagoand Orlando won't see theirs unfold until 2010.

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Average selling price per room for hotels larger than 200 roomsis $115,000 so far this year, down 31% from $167,200 in 2007,Lodging Econometrics reports. For properties with 200 rooms orless, prices are down 10% from last year to $73,800 per room.

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Credit has tightened and interest rates are higher for largerhotel properties, Ford notes, while branded, upscale or mid-marketprojects are able to work with community banks. "Financing is rare,and when it is available it's for smaller projects," he says.

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In its three-year forecast for new hotel openings, LodgingEconometrics estimates at least 1,200 properties with 135,000 roomsopening this year, a 2.8% gross growth rate. Its forecast calls for1,436 new hotels with 158,851 rooms in 2009, up 3.3%, with 1,389hotels and 158,889 rooms in 2010, up 3.2%.

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