NATIONAL
REPORT — The ADR in New York City has been rising rapidly over the past few
years, and so has the number of available hotel rooms, according to the latest
data from CoStar.
New York
City is projected to open more than 5,700 hotel rooms in 2025. That amount is
almost double the No. 2 market (Nashville, another hot hotel market, which is
projected to open more than 2,800 rooms).
The top
markets, by projected 2025 room openings are:
- New York
City (5,719 rooms)
- Nashville
(2,849 rooms)
- San Diego
(2,818 rooms)
- Dallas
(2,749 rooms)
- Phoenix
(2,483 rooms)
“The ongoing
development in New York City is not surprising given the market’s status and
its high performance in recent years,” said Isaac Collazo, senior director of
analytics for STR. “With major sources of leisure and
business travel, New York reported the highest occupancy level of any U.S.
market in both 2023 and 2024. Though less rooms are in construction compared to
2023, there are more rooms in the planning and final planning stages, pointing
to continued investment in the long term.”
The list
features cities that have routinely been in the top five U.S. pipeline lists by
Lodging Econometrics.
“Nashville
is in a similar situation, with most rooms set to open across the upper
midscale and upscale classes this year,” Collazo said. “Unlike NYC, Nashville’s
construction total is up from last year.”
CoStar also
projects a rapid rise in the number of hotels opening over the next few years.
In 2024, CoStar’s data showed 721 hotels and 73,682 rooms completed. In
2025, it projects that 953 hotels and 108,366 rooms will be completed with
1,865 hotels and 198,319 rooms being completed in 2026.
Collazo said
a tough capital market has constricted construction activity over the past
year.
“At the end
of 2024, overall U.S. hotel construction activity was pretty muted with many
projects remaining on the sidelines, as evidenced by the large gains in the
planning stages,” Collazo said. “Restrictive capital and lending standards,
along with high interest rates and construction costs, will keep construction
volume well below the high seen in 2019 for some time.”
Construction in the upper midscale segment is
expected to lead the way in 2025, Collazo said, with nearly 34,000 of those
rooms projected to be completed this year. He said the same segment currently
leads the in-construction room count as well.