PORTSMOUTH, NH – As seen in the Q1 2024 U.S. Hotel Construction Pipeline Trend Report from Lodging Econometrics (LE), at the end of the first quarter, there are 6,065 projects with 702,990 rooms in the pipeline. This new all-time high represents a 9% year-over-year (YOY) increase in projects and a 7% YOY increase in rooms compared to last year.
The details can be seen directly within the stages of the pipeline, which all saw YOY growth in Q1. Presently, there are 1,144 projects comprising 141,336 rooms under construction, marking a 9% increase in projects and a 1% increase in rooms YOY. Projects slated to start construction in the next 12 months total 2,259 projects with 260,968 rooms, reflecting a 10% rise in projects and an 8% increase in rooms YOY. Notably, both projects and room counts in the early planning stage increased by 9% YOY, reaching record-high figures of 2,662 projects and 300,686 rooms, respectively. Of all the projects in the pipeline, a little over half of them are concentrated within the upscale, upper-midscale, and midscale chain scales. In Q1, the upper midscale and midscale segments hit record-high project and room counts. The luxury chain scale also reached a record-high project total in Q1.
The latest data from LE also highlights the dominance of extended-stay brands in the pipeline at Q1, a segment that developers have increasingly favored in recent years. These brands now account for 37% of the total projects under construction, 41% of projects scheduled to begin within the next 12 months, and 39% of projects in the early planning stage. Sixty-three percent of the extended stay projects in the pipeline are branded with brands within the middle tier extended stay segment.
Renovation and brand conversion activities in the U.S. have also seen significant growth, reaching record-high combined totals of 2,041 projects and 266,405 rooms. Brand conversions, in particular, have hit a new record-high of 1,235 projects with 114,680 rooms, growing 14% by projects YOY, while announced renovations at Q1 stand at 806 projects and 151,725 rooms. LE analysts anticipate this robust conversion and renovation activity to continue throughout 2024.
In terms of new hotel openings, the first quarter saw the opening of 114 new hotels with 15,506 rooms in the U.S. Over half of these opens, 72 hotels/8,269 rooms, were in suburban locations, and 60 hotels/10,036 rooms (or 53%/65%) of newly opened hotels were located within the top 50 markets. With a record number of projects in early planning and an increasing number of projects scheduled to start in the next 12 months, LE analysts project modest growth in new hotel openings through 2024. The LE forecast for the remainder of 2024 includes the opening of another 547 projects with 60,483 rooms, totaling 661 new hotels with 75,989 rooms and representing a 1.3% increase in new hotel supply by year-end. Looking ahead to 2025, LE analysts anticipate an additional 790 new hotels with 85,561 rooms to open in the U.S., resulting in a 1.5% supply increase.
The article U.S. hotel development kicks off Q1 2024 with growth and record-highs first appeared in TravelDailyNews International.
