Silicon Valley Supply Growth Rates Increasing in Step with Demand Growth

Lana Yoshi | March 7, 2019

By Lana Yoshii There are 80 proposed hotels and 5 expansions totaling roughly 12,000 rooms planned for development in the greater Silicon Valley area. Worse case, with 31,000 hotel rooms today, there could conceivably be a 39% increase in supply. Is it time to hit the panic button? Since 2000, the two largest surges of new supply occurred in 2003 (4.6% growth) and 2015 (4.8% growth). However, from 2004 to 2014, Silicon Valley's new hotel rooms supply was very mild – maxing out at a 2.3% annual growth in 2014, and averaging at a compound annual growth rate of 0.5%. In recent history, annual new supply exceeded 1,000 new rooms in 20...