Hotel Development
Trends & Projections

— United States Edition  —

Hotel Construction Pipeline Projects Up Slightly 

According to the Q1 2022 Construction Pipeline Trend Report for the United States from Lodging Econometrics (LE), the total U.S. construction pipeline stands at 5,090 projects/606,302 rooms at the end of the first quarter of 2022. LE analysts report that the total U.S. construction pipeline shows a small increase year-over-year (YOY), up 2% by projects, but down 3% by rooms.

At Q1‘22, there are 961 projects/128,784 rooms currently under construction, down 27% by projects and 28% by rooms YOY. Projects scheduled to start in the next 12 months, at 1,911 projects/223,030 rooms, are up 2% by projects and 3% by rooms YOY. Projects and rooms in early planning reached a record high in the first quarter, standing at 2,218 projects/254,488 rooms, up 24% by projects and 12% by rooms YOY.

Notably, the upscale and upper-midscale chain scales dominate the pipeline in Q1 with 63% of projects in the total pipeline concentrated in these two chain scales. This has been the case for several years. Also of note, is that there are a total of 1,420 projects/184,692 rooms in the renovation or conversion pipeline in the U.S. during the first quarter, and project conversions and room conversions reaching an all-time high and increasing 59% by projects and 48% by rooms YOY.

New projects and development planning that was previously on hold are now getting the green light from investors and developers with buoyed confidence thanks to rather robust domestic leisure travel during the first part of the year. With stronger domestic leisure travel in the U.S., along with the albeit slower revival of corporate and group travel, there is growing confidence in the recovery. Developers are eager to move forward with plans and break ground as this upward trend in hotel business demand is expected to continue throughout 2022.

Through year-end 2021, the U.S. opened 826 projects accounting for 106,192 rooms. A total of 113 hotels/12,464 rooms opened in the first quarter of 2022. Over half of these opens, 68 hotels/7,154 rooms, were in suburban locations, but 41 hotels/4,703 rooms of newly opened hotels, or 36%, were in a top 25 market. Reflective of the increasing number of projects in early planning and projects scheduled to start in the next 12 months, LE’s forecast for new hotel openings by projects has risen ever so slightly for 2023. For the remainder of the year, LE forecasts another 649 projects/77,568 rooms to open for a total of 762 hotels/90,032 rooms in 2022, representing a 1.6% increase in new hotel supply. In 2023, LE forecasts an additional 839 hotels/93,169 rooms will open in the U.S., for a 1.6% supply increase.

Marriott, Hilton, and IHG Account for 67% of U.S. Construction Pipeline Projects

In the recently released Q1 2022 United States Construction Pipeline Trend Report from Lodging Econometrics (LE), the franchise companies with the largest U.S. construction pipelines at the end of 2022’s first quarter are Marriott International, with 1,359 projects/171,820 rooms, followed by Hilton Worldwide, with 1,287 projects/146,579 rooms, and InterContinental Hotels Group (IHG), with 785 projects/79,095 rooms. These three companies combined account for 67% of the projects and 66% of the rooms in the total U.S. construction pipeline.

At the end of Q1’22, the franchise company with the most projects in the under construction stage of the pipeline is Marriott International, accounting for 257 projects/37,496 rooms, for a total of 27% of the stage. Marriott International is also the franchise company with the most pipeline projects in the scheduled to start within the next 12 months stage at Q1’22, with 661 projects/81,905 rooms. Hilton Worldwide has the most projects in the early planning stage of the pipeline and is also hitting a record high for the company in this stage, with 710 projects/79,173 rooms. Hilton’s projects in the early planning phase make up 32% of this stage’s projects.

The brands with the largest U.S. pipelines currently are Home2 Suites by Hilton, with record-high counts of 443 projects/45,740 rooms at Q1’22, and Holiday Inn Express by IHG with 298 projects/28,441 rooms. Hilton’s Hampton by Hilton brand follows, with 279 projects/28,675 rooms. Marriott’s TownePlace Suites is next, with project and room highs of 253 projects/23,881 rooms.

During the first quarter of 2022, 113 hotels with 12,464 rooms opened across the U.S. Of these openings, Marriott, Hilton, and IHG branded hotels accounted for 73% with 82 new hotel openings and 9,602 rooms. LE is expecting these top franchise companies to open another 395 hotels with 48,522 rooms by the end of this year.

LE analysts’ forecast for new hotel openings in 2022 anticipates that Marriott will open 196 projects/25,469 rooms, for a U.S. growth rate of 2.9%. Next is Hilton, with 169 projects/20,076 rooms, for a growth rate of 2.7%; followed by IHG with 112 projects/12,579 rooms forecast to open for a growth rate of 3.0%. In 2023, Marriott is expected to open another 221 new projects/26,076 rooms. LE forecasts Hilton will open 172 new projects/20,387 rooms in 2023, and LE expects IHG to open 172 new hotel projects, accounting for 17,165 rooms in 2023.

The Dallas Market Continues to Lead the U.S. Hotel Construction Pipeline at the Close of the First Quarter

In the Q1 2022 U.S. Construction Pipeline Trend Report released by Lodging Econometrics (LE), at the close of the first quarter, Dallas leads all U.S. markets in the number of pipeline projects with 165 projects/19,730 rooms. Following Dallas, the U.S. markets with the largest hotel construction pipelines by project count are Atlanta, with 135 projects/17,646 rooms; Los Angeles with 123 projects/20,176 rooms; New York with 122 projects/20,864 rooms; and Phoenix, with 103 projects/13,820 rooms.

Markets with the greatest number of projects already under construction are New York, with 90 projects/14,710 rooms, and Dallas, with 25 projects/3,698 rooms. Following Dallas, Atlanta has 25 projects/3,928 rooms, Austin has 25 projects/3,381 rooms, and Los Angeles has 21 projects/3,489 rooms presently under construction. These five markets collectively account for 19% of the total number of projects currently under construction in the U.S.

At Q1’22, Dallas has the most projects scheduled to start in the next 12 months, with 56 projects/6,537 rooms. Behind Dallas, are Atlanta with 54 projects/7,133 rooms; Houston, with 46 projects/4,690 rooms; Los Angeles with 45 projects/6,806 rooms; and Phoenix, with 44 projects/4,944 rooms.

Dallas also has the most projects in early planning, at the end of Q1‘22, with 84 projects/9,495 rooms. Los Angeles follows, with 57 projects/9,881 rooms. Next is Atlanta with 56 projects/6,585 rooms; Nashville with 48 projects/5,635 rooms; and Orlando with 42 projects/7,204 rooms.

LE recorded totals of 1,420 projects/184,692 rooms in the renovation and conversion pipeline during the first quarter of 2022. The markets with the largest count of renovation and conversion projects combined are Chicago, with 29 projects/3,985 rooms; Houston, with 28 projects/3,116 rooms; Atlanta, with 22 projects/3,385 rooms; Dallas, with 21 projects/2,370 rooms; and Washington D.C., with 20 projects/4,275 rooms.

The top 50 markets saw 70 projects/8,390 rooms open in the first quarter of 2022. LE is forecasting these same 50 markets to open another 386 projects/51,811 rooms throughout the year, for a total of 456 projects/60,201 rooms by year-end 2022 for a growth rate of 2.3%. In 2023, 420 projects accounting for 51,519 rooms are forecast to open within the top 50 markets, with a 1.9% growth rate.

Of the top 50 markets in the U.S., New York has the greatest number of new hotel openings forecasted for 2022 with 77 hotels/10,934 rooms, for a 9% growth rate. Then Austin, which is forecasted to open 26 hotels/3,387 rooms for a 7.4% growth rate, Atlanta with 20 hotels/2,165 rooms for a 1.9% growth rate, Los Angeles with 19 hotels/3,330 rooms for a 3.1% growth rate, and Detroit with 18 hotels/1,935 rooms for a 4.1% growth rate.