According to Lodging Econometrics’ latest data, Marriott International and Los Angeles lead the U.S. hotel construction pipeline by franchise company and market, respectively. LE placed Marriott’s pipeline at 1,484 projects with 196,023 rooms, an 8 percent year-over-year increase in both categories. Los Angeles’ pipeline stood at 151 projects with 26,670 rooms.
Franchise Company Growth
Hilton (1,373 projects/153,408 rooms) and IHG (960 projects/98,139 rooms) had the next largest pipelines after Marriott. According to LE, both Marriott and Hilton’s total pipelines were near all-time highs. When looking at number of hotels under construction, Marriott was at a record high.
LE identified Home2 Suites by Hilton (415 projects/43,239 rooms), IHG’s Holiday Inn Express (399 projects/37,974 rooms) and Fairfield by Marriott (296 projects/28,662 rooms) as the top brands by U.S. construction pipeline for each of the three leading companies.
Other leading brands from these companies included Hampton by Hilton (306 projects/31,739 rooms), Tru by Hilton (303 projects/29,423 rooms), TownePlace Suites by Marriott (214 projects/21,908 rooms), Residence Inn by Marriott (203 projects/24,746 rooms), Avid Hotels (182 projects/16,627 rooms) and Staybridge Suites (162 projects/16,915 rooms). Together, these brands comprised 44 percent of projects in the total pipeline.
Through the end of the third quarter, Marriott opened 193 new hotels with 24,208 rooms, accounting for 30 percent of all new hotel rooms that opened in the U.S., according to LE. Hilton opened 198 new hotels with 22,450 rooms, accounting for 28 percent of newly opened rooms, and IHG opened 104 new hotels with 10,866 rooms, accounting for 13 percent of rooms.
For 2020, LE predicted Marriott will open 271 projects with 33,945 rooms; Hilton 279 projects with 30,010 rooms; and IHG 176 projects with 16,974 rooms. It forecasted more growth in 2021 for Marriott (291 projects/37,873 rooms) and IHG (225 projects/22,564 rooms), but less growth for Hilton (263 projects/28,231 rooms).
Growth by Market
After Los Angeles, LE identified New York (155 projects/26,605 rooms), Dallas (160 projects/20,020 rooms), Atlanta (137 projects/18,396 rooms) and Houston (138 projects/14,130 rooms) as the U.S. markets with the largest hotel construction pipeline by rooms.
Together, the total pipelines for LE’s top 25 markets accounted for 39.7 percent of all pipeline rooms. While overall supply growth has risen to 2 percent year-to-date in 2019, it stands at 2.5 percent in the top 25 markets and 1.7 percent in the other markets nationwide.
In the first three quarters of 2019, the U.S. opened 704 new hotels with 81,111 rooms. The markets with the highest number of new openings were New York City with 28 hotels and 4,513 rooms, Dallas with 26 hotels and 3,073 rooms, Houston with 18 hotels and 2,285 rooms, Boston with 16 hotels and 2,435 rooms and Nashville with 15 hotels and 1,965 rooms. These markets alone accounted for 15 percent of all new hotels that opened in the U.S. through the end of the third quarter.
During the past three years Dallas opened the most hotels, launching 92. New York debuted 90, Houston 76, Nashville 62 and Atlanta 58. All but Nashville showed supply growth in excess of demand growth year-to-date in 2019. In the next three years, LE expects New York to open 123 hotels, Dallas 107, Houston 87, Atlanta 72 and Nashville 67.