CoStar Finds Hotel Construction Up for Seventh Straight Month

(Illustration courtesy of CoStar)

The number of hotel rooms under construction in the U.S. increased year-over-year for the seventh consecutive month, according to CoStar, Washington, D.C.

CoStar reported the number of hotel rooms in construction increased 7% to 157,253 rooms in September. Rooms in the final planning stage increased 10.4% year-over-year to 268,190 rooms while rooms in the earlier planning stage jumped 38.4% to 336,205 rooms.

“Growth in rooms in construction has accelerated over the last seven months,” STR Vice President of Analytics Isaac Collazo said. “Despite higher interest rates throughout 2024, developer appetite has remained strong. With the recent rate cut in September, and with more on the way, investor sentiment remains positive, as evidenced by continued double-digit growth across the planning and final planning stages of the pipeline.”

Collazo noted hotel properties in the upscale and upper-midscale continue to account for nearly 50% of all rooms in the final phase of the pipeline, while luxury and midscale showed the highest growth in rooms in construction, up 48.5% and 34.5%, respectively.

Chain Scale Segments (as a percentage of existing supply, in-construction room count), per CoStar:
1.    Luxury (5.6%, 8,508 rooms)
2.    Upper Upscale (2.6%, 18,156 rooms)
3.    Upscale (4.2%, 38,401 rooms)
4.    Upper Midscale (3.4%, 40,255 rooms)
5.    Midscale (2.9%, 14,902 rooms)
6.    Economy (1.2%, 7,653 rooms)