The U.S. hotel construction pipeline grew 5% year-over-year (YOY) in Q1 2025, reaching 6,376 projects (749,561 rooms), according to Lodging Econometrics (LE). Key highlights include a 6% YOY rise in rooms and sustained momentum across development stages, driven by brand conversions and new project announcements.
Pipeline Breakdown
- Under Construction: 1,152 projects (145,368 rooms), up 1% in projects and 3% in rooms YOY.
- Scheduled Starts (Next 12 Months): 2,286 projects (263,370 rooms), rising 1% in both metrics YOY.
- Early Planning: 2,938 projects (340,823 rooms), surging 10% in projects and 13% in rooms YOY.
Segment Trends top Categories:
Upscale, upper midscale, and midscale dominate, accounting for 75% of total projects:
- Upscale: 1,443 projects (179,295 rooms).
- Upper Midscale: 2,338 projects (226,349 rooms).
- Midscale: 974 projects (82,094 rooms), hitting a new high with a 9% YOY increase.
- Upper Upscale: Projects rose 10% YOY, reflecting demand for premium offerings.
Brand Conversions Hit Record Highs
- Conversions: 1,421 projects (136,668 rooms), up 13% in projects and 16% in rooms YOY, as owners prioritize cost-effective rebranding.
New Openings and Forecasts
- Q1 2025 Openings: 161 hotels (18,767 rooms).
- 2025 Projections: 740 new hotels (83,548 rooms) expected by year-end, a 1.5% supply growth.
- 2026 Outlook: 848 hotels (92,892 rooms) forecasted, adding 1.6% to supply.
Drivers and Outlook
- NPAs Surge: New project announcements jumped to 313 projects (37,912 rooms) in Q1, with construction starts up 21% in projects and 41% in rooms vs. Q4 2024.
- Market Resilience: Growth reflects confidence in leisure travel recovery and demand for diversified lodging options.
Key Takeaways:
- Pipeline Growth: 6,376 projects (749k+ rooms) signal robust sector confidence.
- Conversion Boom: Rebranding accelerates amid cost and labor pressures.
2025–2026 Supply: Over 1,500 new hotels (176k+ rooms) to enter the market.
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