US Hotel Construction Thrives with Seven Consecutive Months of Steady Growth

• The number of hotel rooms under construction in the U.S. has increased year over year for the seventh consecutive month.
• Despite higher interest rates in 2024, developers’ interest remains strong, particularly in the luxury and midscale segments.

According to data from CoStar the volume of hotel rooms under construction in the U.S. has increased for the seventh month. The growth rate has reportedly accelerated over these months, with 157,253 rooms currently under construction, marking a 7.0% increase from the previous year.

Despite higher interest rates throughout 2024, developers’ interest in hotel construction has not waned. The recent rate cut in September has bolstered investor sentiment, as reflected in the double-digit growth across the pipeline’s planning and final planning stages. Of all the rooms in the final phase of construction, about half are in upscale and upper midscale segments.

The luxury and midscale categories show the most significant growth in construction volumes, with increases of 48.5% and 34.5%, respectively. This data suggests a strong and consistent expansion in the U.S. hotel industry, particularly emphasizing higher-end accommodations.