Hotel Construction Rises for First Time in Nine Months, CoStar Finds

(Chart courtesy of CoStar)   

The volume of U.S. hotel rooms under construction grew year-over-year for the first time since last June, according to CoStar Group, Washington, D.C.

CoStar’s monthly analysis found 156,525 guest rooms under construction in March, a 1.5% increase from March 2023.

The report also found 324,522 rooms in the planning stage–a nearly 40% increase from a year ago—and 263,316 rooms in the final planning stage, up 9.8% from March 2023.

“While the number of rooms in construction has grown, that figure remains below what was seen prior to the pandemic,” STR Vice President of Analytics Isaac Collazo said. “However, month-over-month percentage changes have largely improved since October 2023 and the 156,000 rooms in that final phase of the pipeline is the highest since November of last year.”

Collazo said these increases point to the rebalancing of the industry “and the likelihood that developers are settling in for the long haul with present-day interest rates.”

CoStar found upper-midscale and upscale projects dominate the pipeline, accounting for more than half of the in-construction room count.