Hotel Construction Reaches Historic High

(Image courtesy of Pixabay/pexels.com; Breakout image courtesy of Max Vakhtbovycn)

Lodging Econometrics, Portsmouth, N.H., reported U.S. hotel construction hit a new high in the fourth quarter.

Lodging Econometrics’ Hotel Construction Pipeline Trend report found the total pipeline, including hotel properties in the planning and construction stages, reached 6,378 projects–a new project record–with 746,986 rooms, showing year-over-year growth of 7% in projects and 8% in rooms.

“The U.S. hotel pipeline shows robust activity across all project stages,” the report said, noting there are 1,149 hotel properties totaling 142,238 rooms currently under construction, “reflecting a healthy increase in projects year-over year”.

New hotel openings totaled 583 properties with 67,995 rooms in the U.S. in 2024. This expanded the nation’s hotel supply by 1.2%. Lodging Econometrics projects even stronger growth ahead, with 730 new hotels and 82,538 rooms expected to open this year, which correlates to a 1.5% increase in supply.

Growth is forecast to accelerate further in 2026, Lodging Econometrics said.

Looking at existing hotel properties, the hotel sector reported record-high average daily rate and revenue per available room in 2024, according to CoStar Group, Washington, D.C. But the growth rate of both metrics was the lowest since the declines of 2020.

CoStar said hotel occupancy remained flat last year at 63.0% while the average daily rate increased 1.7% to $158.67. Revenue per available room edged up 1.8% to $99.94.