Year-over-year growth in 1Q25 also represents 6% increase in
rooms; early planning surges 10%.
PORTSMOUTH, New Hampshire – The U.S. construction pipeline
at the end of 1Q25 consisted of 6,376 projects and 749,561 rooms, according to
Lodging Econometrics, representing a 5% year-over-year (YOY) increase in
projects and a 6% increase in rooms.
At the end of 1Q25, there were 1,152 projects comprising
145,368 rooms under construction in the U.S., up 1% by projects and 3% by rooms
YOY. Projects scheduled to start construction anytime within the next 12 months
totaled 2,286 projects with 263,370 rooms, reflecting a 1% rise in both
projects and rooms YOY. Most notably, project and room totals in the early
planning stage experienced significant growth, increasing 10% by projects and
13% by rooms YOY, standing at 2,938 projects and 340,823 rooms, respectively.
LE analysts anticipate 848 new hotels with 92,892 rooms to open by year-end 2026 for an increase in supply of 1.6%.
The top three chain scales by total projects at the end of
Q1 were upscale, at 1,443 projects/179,295 rooms; upper midscale, at 2,338
projects/226,349 rooms; and midscale at 974 projects/82,094 rooms. These three
chain scales accounted for approximately 75% of the projects in the total U.S.
construction pipeline at the end of the first quarter. Notably, however, upper
upscale chain scale projects in the U.S. pipeline reached record highs of 362
projects and 70,603 rooms, up 10% by projects and 7% by rooms. Similarly, the
midscale chain scale hit all-time highs at Q1 with 974 projects/82,094 rooms,
increasing 10% by projects and 9% by rooms YOY.
Brand conversions in 1Q25 reached a record-high 1,421
projects with 136,668 rooms, growing 13% by projects and 16% by rooms YOY.
Combined hotel conversion and renovation activity hit a record-high project
total with 2,050 projects/269,435 rooms.
New project announcements announced into the pipeline during
Q1 stood at 313 projects/37,912 rooms. Projects starting construction during
the first quarter increased 21% by projects and 41% by rooms YOY. This indicated
that in Q1 developers pressed forward with their current projects, suggesting
an upbeat approach to development.
From January through March of 2025, 161 new hotels with
18,767 rooms opened across the United States. For Q2-Q4 of 2025, LE analysts
forecast an additional 579 projects with 64,781 rooms to open, resulting in 740
new hotels opening with 83,548 rooms by year-end, resulting in a 1.5% growth
rate.
Looking ahead, LE analysts anticipate 848 new hotels with
92,892 rooms to open by year-end 2026 for an increase in supply of 1.6%.