According to the recent "U.S. Construction Pipeline Trend Report" released by Lodging Econometrics, Dallas leads the U.S. markets in the number of pipeline projects with 152 hotels and 18,180 rooms at the close of Q4 2021. Following Dallas, the U.S. markets with the largest total hotel construction pipelines by project count are Atlanta, at a cyclical high, with 133 hotels and 17,593 rooms; New York City with 121 hotels and 19,303 rooms; Los Angeles with 120 hotels and 19,815 rooms; and Houston, with 91 hotels and 9,912 rooms.
Despite the impact COVID-19 has had on hotel development, three markets in the U.S. announced more than 10 new construction projects in Q4 2021. Miami had the highest number of new projects announced into the pipeline with 17 hotels and 2,797 rooms. Following Miami is Dallas with 13 hotels and 1,308 rooms, and then Orlando with 11 hotels and 1,791 rooms.
Markets with the greatest number of projects already in the ground, at the end of the fourth quarter, are New York with 90 hotels and 14,513 rooms. Following distantly are Dallas with 28 hotels and 3,945 rooms; Austin, Texas, with 28 hotels and 3,706 rooms; Atlanta with 26 hotels and 4,120 rooms; and Detroit with 23 projects under construction, accounting for 2,432 rooms. These five markets collectively account for 20 percent of the total number of projects currently under construction in the U.S.
Dallas has the most projects scheduled to start in the next 12 months, with 51 hotels and 5,989 rooms. Behind Dallas are Atlanta with 51 hotels and 5,989 rooms; Houston, with 42 hotels and 4,107 rooms; Los Angeles with 41 hotels and 6,278 rooms; and Phoenix with 38 hotels and 4,401 rooms. Dallas also has the largest number of projects in early planning at the end of Q4 2021, with 73 hotels and 8,246 rooms. Los Angeles follows with 57 hotels and 9,907 rooms; Atlanta with 56 hotels and 6,561 rooms; Orlando with 45 hotels and 7,896 rooms; and Nashville with 38 hotels and 4,680 rooms.
Pipeline Variances
An important metric to monitor will be markets with large construction pipelines as compared to their existing census of open and operating hotels, according to LE. These markets are likely to see the fastest supply growth and largest supply-demand variances over the next few years. At the end of 2021, there were 17 markets with total pipelines in excess of 15 percent of their current census. Raleigh-Durham, N.C., tops this list at 24.1 percent, followed by Miami; Fort Worth-Arlington, Texas; Austin; and then Memphis at 22.1 percent.
The markets topping the forecast for new hotel openings in 2022 will be New York City with 48 new hotels and 6,656 rooms for a 5.4 percent growth rate, Atlanta with 22 hotels and 2,398 rooms for a 2.1 percent growth rate, Dallas with 21 hotels and 2,522 rooms for a 2.4 percent growth rate, and Austin with 20 hotels and 2,722 rooms for a 5.9 percent growth rate. LE expects a 2.1 percent average growth rate for the top 25 markets in 2022 and, come 2023, these top 25 markets will experience an average growth rate of 1.9 percent. New York will again top the charts in 2023 for new hotel openings. LE anticipates New York will open 42 new hotels, accounting for 7,058 rooms, again for a 5.4 percent growth rate, followed by Atlanta 21 hotels and 3,664 rooms for a 3.2 percent growth rate, and Dallas with 21 new opens with 2,318 rooms for a growth rate of 2.2 percent.