US construction lowest in 40 quarters

NATIONAL REPORT – The volume of U.S. hotel rooms under construction decreased year over year for a ninth consecutive month, according to September data from CoStar.

Hotels in construction stood at 137,956 rooms (-12.3% YOY); in final planning was 258,836 rooms (-3.5% YOY); and in planning stage at the end of September was 327,304 rooms (-2.6% YOY).

“More than 80,000 rooms below the peak from Q3 2020, construction fell to the lowest point of the past 40 quarters,” said Isaac Collazo, STR’s senior director of analytics. “Uncertainty often leads to inaction, and developers and financial institutions are still waiting for a more favorable environment. Higher building and material costs are also hampering groundbreakings, and we don’t foresee the cycle turning for some time. However, more rooms are under construction now than after the Great Recession—development is down but still happening.”

Chain scale segments (% of existing supply, in-construction room count) for September 2025 (percentage change from September 2024):

1.    Luxury (3.8% / 5,911 rooms)
2.    Upper Upscale (2.1% / 15,292 rooms)
3.    Upscale (3.6% / 33,376 rooms)
4.    Upper Midscale (3.3% / 39,075 rooms)
5.    Midscale (2.4% / 12,746 rooms)
6.    Economy (0.7% / 4,559 rooms)