According to the "Q1 2023 U.S. Construction Pipeline Trend Report" released by Lodging Econometrics, the hotel construction pipeline has grown in the country’s top 25 markets. The top five U.S. markets with the largest hotel construction pipelines at the close of the first quarter are led by Dallas with record-high project and room counts of 184 hotels and 21,810 rooms. Following are Atlanta with 144 hotels and 18,242 rooms, Los Angeles with 118 hotels and 19,066 rooms, Phoenix with 117 hotels and 16,100 rooms and Nashville with 115 hotels and 15,354 rooms.
Markets with the greatest number of projects already under construction at the Q1 close are New York with 54 hotels and 8,682 rooms, Atlanta with 26 hotels and 4,278 rooms and the Inland Empire (a metropolitan area near coastal Southern California) with 26 hotels and 2,584 rooms. Dallas has 25 hotels and 3,739 rooms while Phoenix has 24 hotels and 5,155 rooms projects presently under construction.
Dallas has the most projects scheduled to start in the next 12 months with 70 hotels and 8,076 rooms, followed by Atlanta with 61 hotels and 7,464 rooms, Los Angeles with 45 hotels and 6,894 rooms, Phoenix with 45 hotels and 5,472 rooms and then the Inland Empire with 41 hotels and 4,173 rooms.
Nationally, early planning projects and room counts hit a new all-time high at Q1 with 2,434 hotels and 276,274 rooms. Year over year, the top 25 markets in the U.S., as a group, have seen a 10 percent growth in early planning projects. The markets with the most projects in early planning at the close of the first quarter are again led by Dallas with 89 hotels and 9,995 rooms, then Nashville with 59 hotels and 7,182 rooms, Atlanta with 57 hotels and 6,500 rooms, Los Angeles with 56 hotels and 9,433 rooms and Phoenix with 48 hotels and 5,473 rooms.
Brand conversion and renovation activity continues to be a significant focus in the lodging industry. In the first quarter of 2023, LE recorded record-high renovation and brand conversion totals of 1,953 active hotels and 253,533 rooms. The markets with the largest count of combined renovation and conversion projects are Atlanta with 41 hotels and 4,427 rooms, Houston with 38 hotels and 3,969 rooms, Chicago with 34 hotels and 4,572 rooms, Dallas with 31 hotels and 3,807 rooms, then San Diego with 28 hotels and 4,238 rooms.
New project announcements have been slow to return to pre-pandemic project counts. However, construction starts in the total U.S. pipeline rose 20 percent by projects and 30 percent by rooms year over year.
In the first quarter, Nashville has the highest number of new projects announced into the pipeline with 14 hotels and 1,847 rooms. Dallas follows with 11 hotels and 1,576 rooms, then Atlanta with 10 hotels and 1,146 rooms, Austin with 9 hotels and 1,201 rooms and Phoenix with 9 hotels and 885 rooms.
LE is forecasting the top 50 markets to open 319 new hotels with 42,743 rooms in 2023. LE analysts anticipate that new hotel openings will continue to rise within the top 50 U.S. markets, forecasting 327 new hotels with 43,525 rooms to open through 2024.
In the 2023 forecast, analysts expect New York to lead with the highest number of new hotels to open with 43 accounting for 7,219 rooms, followed by Dallas with 14 new hotels and 2,268 rooms, and the Inland Empire with 14 new hotels with 1,377 rooms. For 2024, LE analysts forecast the Inland Empire to open the most new hotels, with 22 new hotels and 2,191 rooms expected to open. Following the Inland Empire, Atlanta is forecasted to open 21 new hotels and 3,356 rooms in 2024 and then Dallas with 18 new hotels and 1,973 rooms.