There are 6,065 projects with 702,990 rooms in the pipeline at the end of the first quarter of 2024, according to the Q1 2024 U.S. Hotel Construction Pipeline Trend Report from Lodging Econometrics. The new all-time high represents a 9% year-over-year increase in projects and a 7% YOY increase in rooms compared to last year.
Key takeaways
- There are 1,144 projects comprising 141,336 rooms under construction, marking a 9% increase in projects and a 1% increase in rooms YOY.
- Projects slated to start construction in the next 12 months total 2,259 projects with 260,968 rooms, reflecting a 10% rise in projects and an 8% increase in rooms YOY.
- Both projects and room counts in the early planning stage increased by 9% YOY, reaching record-high figures of 2,662 projects and 300,686 rooms, respectively.
- A little over half of all the projects in the pipeline are concentrated within the upscale, upper-midscale and midscale chain scales.
The latest data from Lodging Econometrics also highlights the dominance of extended-stay brands in the pipeline for Q1 2024, a segment that developers have increasingly favored in recent years. These brands now account for 37% of the total projects under construction, 41% of projects scheduled to begin within the next 12 months, and 39% of projects in the early planning stage. Sixty-three percent of the extended-stay projects in the pipeline are brands within the middle-tier, extended-stay segment.
Renovation and brand conversion activities in the U.S. have also seen significant growth, reaching record combined totals of 2,041 projects and 266,405 rooms. Lodging Econometrics analysts anticipate this conversion and renovation activity to continue throughout 2024. Brand conversions hit a new record of 1,235 projects with 114,680 rooms, growing 14% by projects YOY.
For new hotel openings, the first quarter saw the opening of 114 new hotels with 15,506 rooms in the U.S. Analysts project modest growth in new hotel openings through 2024. Over half of these opens (72 hotels/8,269 rooms) were in suburban locations and 53%-65% of newly opened hotels (60 hotels/10,036 rooms) were located within the top 50 markets.
The Lodging Econometrics forecast for the remainder of 2024 includes the opening of another 547 projects with 60,483 rooms, totaling 661 new hotels with 75,989 rooms and representing a 1.3% increase in new hotel supply by year-end. Looking to 2025, analysts anticipate an additional 790 new hotels with 85,561 rooms to open in the U.S., resulting in a 1.5% supply increase.
