In the final months of 2024, the U.S. hotel construction pipeline climbed to a new historic level.
The total pipeline reached a high of 6,378 projects, representing some 746,986 rooms, in the fourth quarter of the year, according to Lodging Econometrics’ latest Hotel Construction Pipeline Trends Report.
The total hotel pipeline saw year-over-year growth of 7% in projects and 8% in rooms in Q4, with “robust activity across all project stages,” according to Lodging Econometrics. Higher-tier segments led other chain scales in the pipeline in the quarter. And Lodging Econometrics anticipates stronger growth ahead for hotel openings.
Pipeline breakdown
In the fourth quarter of 2024, there were 1,149 projects, totaling 142,238 rooms, currently under construction, reflecting a healthy increase in projects year over year, according to Lodging Econometrics.
There are 2,259 projects, with 259,108 rooms, scheduled to break ground between now and the next 12 months, the company detailed in a release.
The “most dramatic growth” in the pipeline in Q4 was for projects in the early planning stage, which reached “unprecedented” counts of 2,970 projects and 345,640 rooms, according to Lodging Econometrics. This reflects 15% and 19% year-over-year growth in projects and rooms in the early planning stage, respectively, the company detailed.
Quarter over quarter, the total U.S. hotel construction pipeline increased by 2.6% in projects and 3.3% in rooms. In each quarter of 2024, the hotel project pipeline reached new highs.
Market standouts
When looking at markets specifically, Dallas led the nation’s hotel construction pipeline in Q4 with a record-breaking 204 projects, totaling 23,669 rooms, according to Lodging Econometrics. Atlanta followed with a record 168 projects, or 19,431 rooms. Nashville, Phoenix and the Inland Empire in California also made the top five.
New York City led other U.S. markets for the most projects under construction in the quarter at 36, while Dallas dominated for the most projects scheduled to break ground in the next 12 months as well as those in the early planning stages.
Dallas also emerged as the leader in new project announcements in the quarter, with 20, representing 2,061 rooms. Phoenix followed with 12 projects, or 1,376 rooms. Phoenix has been a hotbed for extended stay development, in particular, over the last several months as infrastructure projects ramp up across the metropolitan area driving demand for longer-term accommodations, local hospitality pros previously told Hotel Dive.
Leading segments
By chain scale, upper midscale hotels led others in the Q4 pipeline, with a record 2,354 projects and 227,845 rooms, according to Lodging Econometrics. The upscale segment followed with 1,471 projects, representing 182,474 rooms.
In August, STR and Tourism Economics forecasted that upper-tier segments would see the highest RevPAR growth in both 2024 and 2025.
Meanwhile, several hotel players including Choice Hotels International have recently focused on growth in the upper midscale and upscale segments.
At the end of Q4, the midscale segment had reached a new record of 957 projects and 80,436 rooms, while the upper upscale chain scale stood at a record 338 projects.
Across segments, brand conversions maintained strong momentum through year-end 2024, reaching a record 1,336 projects with 128,736 rooms, according to Lodging Econometrics.
Combined, renovation and conversion projects represented a significant portion of hotel development activity during the quarter, totaling 1,997 projects with 255,816 rooms. Washington, D.C., led these totals with 34 projects comprising 5,204 rooms.
Openings outlook
The nation’s hotel supply increased 1.2% in 2024 from the previous year, with new hotel openings totaling 583 hotels, or 67,995 rooms, Lodging Econometrics reported.
Lodging Econometrics anticipates that 730 new hotels, with 82,538 rooms, will open in 2025. This would correlate to a 1.5% increase in supply year over year in 2025.
Top hotel openings scheduled for this year include Hyatt Hotels’ inaugural Hyatt Studios property in Mobile, Alabama; IHG Hotels & Resorts’ InterContinental Indianapolis; Marriott’s W New York; and boutique hotels Municipal Grand in Savannah, Georgia, and The Vineta in Palm Beach, Florida.
Openings growth will accelerate further in 2026, with 904 new hotels and 97,328 rooms scheduled to open, Lodging Econometrics forecasted.
