Dive brief:
- The Dallas market leads the US hotel construction pipeline with an all-time high of 189 projects consisting of nearly 22,000 rooms, followed by Atlanta, Nashville, Phoenix and California’s Inland Empire area, according to a report by Lodging Econometrics, a hotel data provider.
- Dallas ranks first nationally for most projects under construction, projects scheduled to begin in the next 12 months and projects in early planning, while Orlando, Florida saw the highest number of announced projects underway, according to the report. New York City continued to have the largest number of projects under constructionwith 46 projects and 8,386 rooms.
- Mid- to high-scale and extended-stay projects dominate the US construction backlog, accounting for 38% of all projects, analysts forecast. growth of new hotel openings in the coming years, according to Lodging Econometrics.
Diving knowledge:
According to the report, the total hotel construction pipeline in the United States increased to 5,704 projects by the end of the third quarter of 2023, a 7% year-over-year increase.
This is largely because a recovery of the hospitality industry coupled with increased consumer confidence have led hotel companies to prepare their construction pipelines. For example, the Dodge construction network recently posted the latest jump in commercial construction starts gains in parking structures and hotels.
Some of the innovations and openings in the sector in recent months are:
Medium-high scale chains lead the project count, followed by high-end chains. According to the report, extended stay projects make up a significant portion of the portfolio, with mid-tier extended stay brands also playing a significant role. This includes activity from Marriott, Hilton, Best Western, Hyatt and IHG.
Renovation and conversion projects remain strong, with rooms in renovation or conversion peaking at the end of the third quarter. Lodging Econometrics predicts a steady increase in new hotel openings, with a growth rate of 1.4% and 1.5% in new hotel supply for 2024 and 2025, according to the report .
