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CoStar: Hotel Pipeline’s Planning Phases Reflect Confidence in Travel
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(Chart courtesy of CoStar)
CoStar Group, Washington, D.C., reported activity in the planning phases of the U.S. hotel pipeline remains up, while rooms actually in construction decreased after two months of gains.
“The number of rooms in construction fell in December following a nearly 7% increase in October that held steady through November,” STR Vice President of Analytics Isaac Collazo said. “For most of 2023, rooms in construction trailed 2022, but the increases in both the final planning and planning stages point to confidence in travel for the foreseeable future. Historically, the final phase of the pipeline has declined month over month in December.”
The STR Pipeline Report for December noted upper-midscale and upscale hotel projects continue to dominate the pipeline, accounting for more than half of the in-construction room count.
Compared to December 2022, the number of hotel guest rooms in construction fell 4.5% to 152,114 rooms, STR said. But rooms in the planning and final planning stages both increased significantly. Rooms in the planning stage increased 32.7% year-over-year to 318,597 and rooms in the final planning stage increased 19.7% to 255,039.
Looking at chain-scale segments, STR reported the luxury segment grew 4.7% in December to 6,631 rooms compared to 3.9% growth in the upscale segment to 34,457 rooms. The upper-midscale segment grew by 3.5%, or 42,467 rooms.