Dive brief:
- The global hotel construction pipeline reached an all-time high in the second quarter of 2024, with the United States leading all other countries by number of projects, according to Lodging’s Q2 2024 Global Construction Pipeline Trend Report Econometrics.
- The total global pipeline increased 6% year over year to a record 15,453 projects, or nearly 2.4 million rooms, the report details. The United States beat out China for the most projects in the pipeline, with a record 6,095 projects.
- Globally, upper mid-scale, high-end and mid-scale chain scales dominated the total portfolio in the second quarter, accounting for 65% of projects. Hotel industry leaders recently predicted that top-tier chains will benefit from changing traveler behavior for the rest of this year and beyond.
Diving knowledge:
In the second quarter of this year, there were 6,265 hotel projects, or 1.2 million rooms, under construction worldwide, according to the report. In the quarter, there were 3,972 projects scheduled to begin construction in the next 12 months, as well as 5,216 projects in the early planning stages.
The United States led all other countries, accounting for 39% of projects in the global portfolio in the second quarter, Lodging Econometrics reported. And Dallas and Atlanta led all other cities worldwide for the largest hotel construction pipelines in the quarter.
China followed the US, representing 25% of projects in the global portfolio. Together, the two countries accounted for 64% of the hotel projects in the total portfolio. India, Canada and Saudi Arabia “followed at a distance” the US and China, according to Lodging Econometrics.
Across the pipeline, the upper mid-range, high-end and mid-range segments “dominated” in the second quarter, the report detailed.
Upper mid-scale hotel projects (4,540) accounted for 29% of total global projects in the quarter. The luxury segment, meanwhile, reached a record pipeline of 3,688 projects, or 634,050 rooms. And the number of medium-scale hotel projects increased by 5% year-on-year in the second quarter, reaching 1,868 projects.
Upper-level segments will experience higher RevPAR growth than other levels of the chain through 2025, STR and Tourism Economics forecast earlier this month. And this growth could boost construction in these segments.
Yield growth at the chain’s upper-tier flights will be a result of “high-income households continuing to travel,” STR President Amanda Hite noted in the outlook. Meanwhile, low- and middle-income households are expected to weaken travel spending, and midscale and budget hotels “will feel the effect of fewer low-income travelers,” according to Hite.
