The latest data from Lodging Econometrics also shows that renovation and
conversion activity has hit record highs.
The hotel construction
pipeline in the United States continues to see steady growth, according to the
latest data from Lodging Econometrics, and that trend is expected to continue. In addition, activity for renovation/conversion deals has hit the highest totals ever
recorded by the company.
At
the end of the third quarter, the U.S. had 59,569 operating hotels, accounting
for 5,647,346 rooms. Through the first three quarters of 2023, 345 hotels
opened, totaling 41,114 rooms. LE expected another 182 hotels and 24,790 rooms
to open by the end of 2023. That would bring the total to 59,751 hotels and
5,672,136 rooms, reflecting a supply increase of 1.2% year-over-year.
That
supply is expected to increase slightly year-over-year in 2024, with LE
forecasting 664 hotels and 79,286 rooms over the next year, representing a 1.4%
supply increase YOY.
Construction pipeline
The
LE data shows that through Q3, there were 1,063 projects and 140,331 rooms
under construction. Those numbers reflect an 8% increase for projects and a 4%
for rooms YOY.
That
construction trend is expected to steadily increase in 2024, with 2,234
projects and 257,729 rooms scheduled to start construction in the next 12
months. That would reflect an 8% increase for projects and a 9% increase for
rooms YOY.
The
2,407 projects and 274,616 rooms in the early planning stages sit just shy of
an all-time high, and each increased 7% YOY. Those totals are just 27 projects
and 5,296 rooms shy of a record.
Activity
for renovations and conversions has hit the highest totals ever recorded by LE,
with 1,100 projects and 146,757 rooms at the end of 3Q23. The renovation and
conversion active pipeline sits at 1,912 projects and 258,568 rooms, a peak
number for the latter. LE analysts expect those positive trends to continue
over the next two years.