U.S. Sees Unprecedented Growth in Hotel Construction Pipeline

The U.S. hotel construction industry marked a record-breaking year in 2024, with 6,378 projects in the pipeline, as per the latest Hotel Construction Pipeline Trend report by Lodging Econometrics (LE). The total number of rooms in these projects is 746,986, representing a 7% increase in projects and an 8% increase in rooms compared to the previous year.

The report further breaks down the data into different project stages. Currently, 1,149 projects are under construction, totaling 142,238 rooms. An additional 2,259 projects, equating to 259,108 rooms, are slated to commence construction within the next 12 months.

The early planning stage saw a notable surge, with a 15% increase in projects and a 19% rise in room counts compared to the previous year. This stage currently boasts 2,970 projects, accounting for 345,640 rooms.

In analyzing the data by chain scale, upper midscale hotels were in the lead, with 2,354 projects and 227,845 rooms. Upscale hotels followed suit with 1,471 projects and 182,474 rooms. The midscale segment reached a new milestone with 957 projects and 80,436 rooms, while the upper upscale chain scale recorded 338 projects.

2024 also witnessed a surge in new project announcements, with 459 new projects accounting for 58,123 rooms entering the pipeline. In addition, brand conversions maintained a steady pace, reaching a record high of 1,336 projects with 128,736 rooms.

Despite a slight decline in renovation activity in Q4, the sector remained strong, with 661 projects comprising 127,080 rooms. Renovation and conversion projects combined constituted a significant portion of hotel development activity, totaling 1,997 projects with 255,816 rooms.

The hotel supply in the U.S. expanded by 1.2% in 2024, opening 583 new hotels encompassing 67,995 rooms. LE predicts stronger growth in 2025, with 730 new hotels and 82,538 rooms opening, representing a 1.5% increase in supply. The growth is anticipated to gain momentum in 2026, with the opening of 904 new hotels and 97,328 rooms, boosting the national supply by 1.7%.