Hotel Developers Facing Rising Lumber Prices
One area we find ourselves discussing often is the rising cost of hotel construction. Our last newsletter highlighted hotel construction type trends as well as general increases in material prices across the US. Today we’ll expand on this and look specifically at how the rising cost of lumber has been increasing new-build prices for wood framed hotels.
One of the big drivers behind this is the recently announced US tariffs on Canadian lumber on softwood. One-third of U.S. lumber supplies are imported and more than 95% of those imports are from Canada.* Trade issues, however, are not the only reason prices are increasing as natural disasters have also played a role. Hurricanes Harvey, Irma, Maria and Nate have increased demand for new lumber in damaged areas and wildfires in western parts of Canada and in Northern California have diminished supply. See below for a summary of softwood lumber price changes over the last 12 months.
Here are some important facts to consider:
- The final price for softwood has increased 22% since the start of 2016. **
- Softwood lumber prices have increased 7.2% over the first three months of 2017. ***
- The new tariffs add between 17.41% and 30.88% to the cost of softwood lumber imports. ****
Rising material and labor prices are causing hoteliers to explore all available options for construction types on new projects to find the best fit for pricing, speed and availability. Please don’t hesitate to contact us and we can share our experiences and offer cost-effective design solution for today’s changing market.