According to Lodging Econometrics’ most recent Construction Pipeline Trend Report for the United States, at the close of 2022’s fourth quarter, the U.S. construction pipeline stands at 5,465 hotels and 650,626 rooms, up 14 percent by projects and 12 percent rooms year over year.
In Q4, all stages of hotel construction in the U.S. experienced positive year-over-year growth. At the close of the quarter, there are 1,008 hotels with 135,492 rooms under construction, up 4 percent by projects and 3 percent rooms year over year. Projects scheduled to start construction in the next 12 months stand at 2,073 hotels with 235,222 rooms, up 14 percent by projects and 12 percent by rooms year over year. Projects and rooms in the early planning stage increased 18 percent and 17 percent year over year, respectively, reaching all-time high counts of 2,348 hotels with 279,912 rooms.
The 2023 outlook for the lodging industry looks strong, as it continues to recover from the lows experienced throughout the past two years. Although the U.S. and the hotel industry continue to face some economic challenges, travel and hotel bookings increased substantially during 2022 and the new construction pipeline in the U.S. continues to grow at a moderate pace with new project announcements and construction-starts increasing 35 percent year over year and 36 percent year over year, respectively.
At the end of the fourth quarter, brand conversion room counts reached record highs of 1,030 hotels and 102,162 rooms. The renovation pipeline also remained strong in Q4, reaching the highest project counts seen since Q1 2019, standing at 900 hotels with 148,105 rooms. Combined, renovation and conversion activity accounts for 1,930 hotels and 250,267 rooms, record-highs by projects and up 53 percent year over year by projects and 45 percent by rooms year over year.
Top Markets, Top Brands
The U.S. markets with the greatest number of projects in the construction pipeline, at the end of the fourth quarter, are Dallas with 176 hotels and 20,790 rooms. Following are Atlanta with 145 hotels and 18,100 rooms, Los Angeles with 122 hotels and 19,419 rooms, Phoenix with 116 hotels and 16,229 rooms and Nashville with 106 projects and 14,198 rooms.
Franchise companies topping the pipeline with the greatest project and rooms counts at Q4 are Marriott International with 1,490 hotels and 180,113 rooms, Hilton with 1,378 hotels and 154,790 rooms and IHG with 789 hotels and 78,951 rooms.
The brands with the largest number of projects in the pipeline at Q4 close are Home2 Suites by Hilton, with 521 hotels and 53,735 rooms; Marriott’s TownePlace Suites with 320 hotels and 29,802 rooms; and IHG’s Holiday Inn Express with 293 hotels and 27,817 rooms.
Throughout 2022, the U.S. opened 464 new hotels, accounting for 54,620 rooms, for a growth rate of 1.0 percent. LE analysts expect new hotel openings to increase in 2023 with 607 hotels and 72,665 rooms forecasted to open, representing a 1.3 percent supply increase; and in 2024, 722 hotels and 82,813 rooms are expected to open, for a 1.5 percent supply increase.