Dive Brief:
- In June, U.S. hotel construction activity was the highest it’s been since February 2023, according to data from CoStar.
- Also as of June, the number of hotel rooms under construction in the U.S. had grown year over year for four consecutive months, according to STR’s Vice President of Analytics Isaac Collazo.
- While upscale and upper midscale “continue to dominate,” Collazo said, activity in those segments is slowing as midscale and economy hotels “show the most growth.”
Dive Insight:
Per CoStar data, 157,713 hotel rooms are in construction, up 5.5% year over year; 266,619 rooms are in final planning, up 9.8%; and 333,827 rooms are in planning, up 38.7%.
Upscale and upper midscale rooms account for “about 50% of all rooms in the final phase of the pipeline,” Collazo said.
The upper midscale and upscale segments led for most hotel rooms under construction in June
Meanwhile, newer brands and extended stay hotels are making up “most of the new construction across the midscale segment,” he added.
Extended stay dominated the record U.S. hotel construction pipeline in the first quarter of this year, according to Lodging Econometrics.
Several hotel players are expanding their extended stay hotel brands, such as Choice Hotels International’s Everhome and WoodSpring Suites; Hyatt’s Hyatt Studios, Hilton’s LivSmart Studios and Marriott International’s StudioRes.
And relative newcomer LivAway Suites is undergoing a strategic brand expansion, with recent openings in Utah and Maine.
As of May, New York led the top 50 U.S. markets for the most hotels presently under construction, Lodging Econometrics reported.
