Dive Brief:
- Among U.S. markets, New York City and Nashville, Tennessee, are projected to open the most hotel rooms in 2025, according to new data from CoStar.
- Some 5,719 rooms are projected to open this year in New York City, while 2,849 rooms will open in Nashville, per CoStar. San Diego (2,818 rooms), Dallas (2,749 rooms) and Phoenix (2,483 rooms) will follow for the most room openings this year.
- Anticipated openings in New York City and Nashville follow strong travel fundamentals and hotel performance in the markets, according to Isaac Collazo, senior director of analytics at STR. Upper-tier hotels will lead for openings, though hotel construction may face some challenges nationwide, Collazo noted.
Dive Insight:
Ongoing hotel development and anticipated openings in New York City are “not surprising given the market’s status and its high performance in recent years,” Collazo said in a statement, adding that the city has been a major source of leisure and business travel.
In 2024, nearly 65 million visitors came to New York City, a 3.5% year-over-year increase, according to the office of New York City Mayor Eric Adams.
New York City experienced the highest occupancy level of any U.S. market in both 2023 and 2024, according to CoStar. In Manhattan, specifically, the luxury hotel segment has driven significant RevPAR gains of late, per PwC.
Higher-tier segments are driving growth in Nashville as well, with the most rooms set to open across the upper midscale and upscale chain scales this year, according to Collazo.
This trend tracks nationwide, with the U.S. expected to open nearly 34,000 upper midscale rooms in 2025 — “the same segment that currently leads the in-construction room count,” Collazo said. Last month, Lodging Econometrics reported that upper midscale hotels led others in the total U.S. hotel construction pipeline in the fourth quarter of 2024.
In total, CoStar projects that 953 hotels, or 108,366 rooms, will open in 2025. However, several factors could challenge the construction environment.
“Restrictive capital and lending standards, along with high interest rates and construction costs, will keep construction volume well below the high seen in 2019 for some time,” Collazo said.
