LE: Global hotel construction pipeline up year over year

According to the Q2 ‘23 Global Construction Pipeline Trend Report from Lodging Econometrics, the total global construction pipeline stands at 14,572 hotels and 2,310,238, up 3 percent year over year by projects and 1 percent year over year by rooms.

Worldwide, at the close of the second quarter, there are 6,154 hotels and 1,108,498 rooms under construction, 3,679 hotels and 506,760 rooms scheduled to start within the next 12 months, and 4,739 hotels and 694,980 rooms in the early planning stage.

Luxury, upper-upscale and the upper-midscale chains dominate the pipeline at Q2, reaching record project counts at Q2 and accounting for 47 percent of the projects in the total pipeline. Of that 47 percent, upper-midscale hotel projects comprise 29 percent of the projects in the total global pipeline with a record 4,236 projects and 558,159 rooms. Upper-upscale projects stand at 1,653 hotels and 374,407 rooms at Q2, while luxury hotel projects increased 10 percent year over year to close the quarter at 909 hotels and 180,538 rooms.

Top Markets

Across the globe, the top countries by project count are the United States, with 5,572 hotels and 660,061 rooms, and China with 3,666 hotels and 678,965 rooms. The U.S. accounts for 38 percent of the projects in the global pipeline while China accounts for 25 percent, resulting in 63 percent of the global pipeline being concentrated within these two countries. Following distantly is India with 480 hotels and 57,161 rooms, the United Kingdom with 322 hotels and 45,181 rooms, and Saudi Arabia with 276 hotels and 72,144 rooms.

The markets with the largest pipeline counts worldwide at Q2 are Dallas with 184 hotels and 21,501 rooms; Atlanta with 141 hotels and 17,993 rooms; and Chengdu, China, with 140 hotels and 27,890 rooms. These are followed by Phoenix with 119 hotels and 16,107 rooms and Shanghai with 117 hotels and 22,887 rooms. Of the 11 markets having over 100 projects in their total pipelines, seven are located in the U.S., three are in China and one is in Saudi Arabia.

Top Companies & Brands

Three franchise companies top the global construction pipeline by project count at Q2, accounting for 50 percent of the projects in the total global pipeline. These companies are Hilton with 2,808 hotels and 398,742 rooms, Marriott International with 2,679 hotels and 429,925 rooms, and IHG Hotels & Resorts with 1,764 hotels and 259,668 rooms. Accor follows with 930 hotels and 160,951 rooms, then Hyatt Hotels & Resorts with 417 hotels and 77,238 rooms.

Upper-midscale brands for the top three companies lead the total global pipeline in project counts with Hilton’s Hampton Inn brand standing at 790 hotels and 102,607 rooms, IHG’s Holiday Inn Express has 599 hotels and 74,036 rooms, and Marriott’s TownePlace Suites closed the quarter with 364 hotels and 34,125 rooms. Accor’s top brand at Q2 is its upscale Novotel brand with 137 hotels and 26,474 rooms and Hyatt’s upscale Hyatt Place brand with 105 hotels and 16,408 rooms at the close of the quarter.

Throughout the first half of 2023, 868 new hotels accounting for 129,047 rooms opened worldwide, with an additional 1,663 hotels/251,468 rooms scheduled to open by year-end. LE analysts forecast a total of 2,531 new hotels with 380,515 rooms to open in 2023. In 2024, new openings are forecast to reach 2,674 hotels, accounting for 415,699 rooms. For 2025, LE analysts forecast 2,701 new hotels with 429,006 rooms to open around the world.