In the first quarter of this year, the U.S. hotel construction pipeline saw year-over-year growth, though project counts dropped sequentially from a record high at the end of 2024.
The total pipeline stood at 6,376 projects, or 749,561 rooms, in Q1 2025, representing 5% and 6% year-over-year growth, respectively, according to Lodging Econometrics’ Q1 2025 U.S. Hotel Construction Pipeline Trend Report. There were two fewer projects in the pipeline from the previous quarter, though.
Pipeline growth across project stages was prevalent in Q1, with projects in the early planning stage surging, per Lodging Econometrics. Upper-tier chain scales led with the most hotels under construction in Q1, and conversions saw notable growth as well. Across the U.S., Dallas was the most robust market for hotel construction in the first months of this year.
Early-stage projects ‘surge’
In the first quarter, there were 1,152 projects totaling 145,368 rooms under construction in the U.S., up 1% and 3% year over year, respectively, according to the report. On a sequential basis, there were three more projects under construction in Q1 2025 compared to Q4 2024, but Q1’s count was down from Q3 2024.
There were 2,286 projects scheduled to start construction within the next 12 months in Q1, reflecting a 1% year-over-year increase, the report found.
The most notable growth in the pipeline was in the early planning stage, which saw 10% year-over-year gains in projects and 13% growth in rooms in the first quarter, according to Lodging Econometrics. There were 2,938 projects in the early planning stage in Q1, which was down, though, from an unprecedented 2,970 projects the prior quarter.
Upper-tier chain scales lead
Upper-tier categories had a leg up over other chain scales in the first quarter of this year.
The upscale segment had the most hotel projects (1,443, representing 179,295 rooms) in the pipeline in Q1, followed by the upper midscale segment with 2,338 projects, or 226,349 rooms, according to the report.
Choice Hotels International and Wyndham Hotels & Resorts both made a concerted push in upscale in the first quarter. Hyatt, meanwhile, expanded in the upper midscale segment, launching a new brand, Hyatt Select.
The midscale segment contributed the third-highest number of projects (a record 974) to the total pipeline, per the report. The upscale, upper midscale and midscale chain scales accounted for approximately 75% of the projects in the total U.S. hotel construction pipeline in Q1, Lodging Econometrics reported.
While not a leading chain scale, the upper upscale segment notably saw project counts increase 10% year over year, according to Lodging Econometrics.
Across segments, growth in hotel brand conversions was strong in Q1, with conversion projects reaching a record-high of 1,421, up 13% year over year, per Lodging Econometrics. Combined, hotel conversion and renovation activity hit a high of 2,050 projects, or 269,435 rooms, in Q1.
At the start of the year, Lodging Econometrics SVP Bruce Ford told Hotel Dive there will be an uptick in hotel renovations in 2025, as a large number of property improvement plans come due this year. He also noted that President Donald Trump’s then-proposed tariffs could impact supply chains, leading to product delays for hotels.
Earlier this month, Trump announced a slate of tariffs that hospitality professionals forecast will drastically impact travel demand as well.
Dallas tops other markets
Dallas led other U.S. markets for the largest hotel construction pipeline in Q1, with 203 projects, or 24,496 rooms, according to Lodging Econometrics. Dallas saw 9% project and 11% room growth year over year in the first quarter.
Following Dallas was Atlanta with 166 projects, Nashville with 127 projects, Phoenix with 126 projects and Austin with 124 projects, Lodging Econometrics reported.
In terms of renovation and brand conversion activity, Washington, D.C., led with the largest count (35) of combined renovation and conversion projects in Q1.
Nationwide, 161 new hotels opened in the first quarter, led by the Atlanta market, which saw seven hotel openings. Dallas and New York followed Atlanta with six and five openings, respectively, per the report. Notable hotels also opened in New Orleans, Indianapolis and San Francisco in the quarter.
Lodging Econometrics analysts forecast an additional 579 projects will open this year, resulting in 1.5% year-over-year growth in hotel openings in 2025. New York is slated to have the most hotel openings this year.
