The total of the US The hotel construction pipeline remained relatively flat year-over-year in Q3 2025, while brand conversions posted record project totals, according to Lodging Econometrics’ Q3 2025 US Hotel Construction Trends Report.
The overall domestic project portfolio remained somewhat stable at 6,205 projects compared to the third quarter of last year, which set an all-time high. By rooms, the pipeline grew by 1% to 728,416 rooms during the period.
Through the third quarter of 2025, 490 new hotels with 57,479 rooms are expected to open in the U.S. By the end of the year, another 202 projects, or 22,368 rooms, are expected to open, according to the report.
Despite its relative stability, the year-on-year hotel construction backlog in the third quarter of 2025 was down from the previous two quarters. In the first quarter, it included 6,376 projects, or 749,561 roomswhile in Q2, there were 6,280 projects, or 737,036 rooms.
At the close of the third quarter, the US hotel pipeline had 1,118 projects, or 137,620 rooms, under construction, according to the latest report. In addition, there were 2,234 projects, or 258,973 rooms, scheduled to begin construction in the next 12 months, and an additional 2,853 projects, or 331,823 rooms, in the early stages of planning.
“On a year-over-year basis, both starts in the next 12-month stage of the construction pipeline and the early planning stage increased modestly, while the under-construction stage experienced a marginal decline,” the report said, adding that there were 230 new projects, or 28,951 new rooms, announced for the quarter. In terms of renovations, there were 566 projects, or 123,142 rooms, for the period.
Brand conversions set record
Brand conversion activity closed the quarter with 1,477 projects, or 148,035 rooms, up 18% by projects and 22% by rooms year-on-year. Combined, the total renovation and rebranding portfolio in the US is 2,043 projects, or 271,177 rooms, up 4% by projects and 3% by rooms year-over-year.
The markets with the highest combined number of reforms and conversions in the third quarter were the Washington, DC area, which had 37 projects, or 4,745 rooms, followed by Houston, which had 34 projects, or 5,360 rooms, and Atlanta, which had 33 projects, or 3,988 rooms.
Dallas outperforms other markets
In the five markets with the largest hotel construction pipelines, Dallas led with 197 projects and 24,310 rooms for the quarter, followed by Atlanta, which had 160 projects with 18,239 rooms. Nashville, Tenn., set a record high with 130 projects and 17,183 rooms, while Phoenix posted 125 projects, or 16,481 rooms, and Austin, Texas, had 124 projects representing 14,486 rooms.
In the next 12 months, Dallas has the most projects scheduled to break ground, with 80 projects, or 8,894 rooms. Dallas also led the markets in the third quarter in terms of hotel projects in the early planning phase, with 85 projects, or 11,748 rooms.
Phoenix had the most projects under construction in the third quarter, with 36 projects or 5,009 rooms. Dallas followed with 32 projects, or 3,668 rooms, and New York with 31 projects, or 5,458 rooms. Miami and Atlanta each had 21 projects under construction, accounting for 4,345 rooms and 2,503 rooms, respectively.
Extended stay and upper mid-scale projects lead the pipeline
The upper mid-range scale continued to have the largest number of projects, with 2,279 projects, or 219,385 rooms, in the quarter, while the luxury chain scale had 1,383 projects representing 172,238 rooms. The two segments combined accounted for 59% of all projects in the total portfolio.
Mid-segment pipeline increased 2% year-over-year by both projects (947) and rooms (78,956). The combined project count of the chain’s three main scales (upper mid-scale, upper scale and mid-scale) represented 65% of all projects in the total portfolio for the quarter.
Extended stay hotel projects accounted for 40% of all projects and 34% of all rooms in the total US hotel construction portfolio.
In the third quarter, the category had 2,468 total projects, or 250,754 total rooms, with mid-level extended stay hotels representing the largest segment, with 1,648 projects, or 154,499 rooms, up 3% year-over-year for both projects and rooms.
There were 431 projects, or 45,542 rooms, currently under construction in the extended stay category, and 983 projects, or 102,064 rooms, scheduled to begin construction next year. An additional 1,054 projects, or 103,148 rooms, in the extended stay segment are in the early planning stages.
Slow but steady long-term growth
Lodging Econometrics projected that 2025 would end with 692 new hotels opening, representing a projected year-over-year growth rate of 1.4%.
Looking ahead, analysts in the report predict that 754 new hotels, or 83,118 rooms, will open by 2026, with a projected growth rate of 1.5%. Dallas and Phoenix are expected to lead the markets next year with 25 new hotel openings each (2,746 and 2,698 rooms, respectively).
By 2027, LE predicts 864 new hotels, or 91,571 rooms, will open in the U.S. at a growth rate of 1.6%, with Dallas again leading the markets followed by the Inland Empire in California.
