US construction fell for 6th consecutive month

Isaac Collazo, senior director of analytics at STR, said the number of rooms under construction is the lowest it’s been in the last five years.

“With hotel demand trending downward, unrelenting economic uncertainty and rising construction costs, it’s not surprising that the number of hotel rooms under construction is at a 20-quarter low,” he said.

Collazo said that the majority of the rooms under development are located in the South, and most are situated in secondary and tertiary markets.

“More than half of all rooms under development are in the Southern region and mostly outside of the top 25 markets,” he said. “Like most of the pipeline, these rooms are mostly in the two planning phases, and many will likely not be built shortly.”

Here are the latest numbers for the U.S. hotel pipeline in June 2025 (including percentage change from June 2024): 

In construction: 138,922 rooms (-11.9%)

Final planning: 266,276 rooms (-0.1%)

Planning: 349,802 rooms (+4.8%)

When the construction numbers are broken down by chain scale, they reflect the bifurcation that has been prevalent in the U.S. hotel industry over the past few years with higher growth numbers in upscale and slower growth in economy. The majority of rooms under construction are located in upscale and upper mid-scale chain hotels.

“Most rooms under construction continue to be centered in the middle tier (upscale and upper upscale),” Collazo said. “While we expect the number of these projects to decrease, they will remain the focus of new development for the foreseeable future.”

Here are the construction numbers broken down by chain scale through June, with the percentage of existing supply and in-construction room count:

Luxury: (4.1%/6,443 rooms)

Upper upscale: (2.3%/16,336 rooms)

Upscale: (3.7%/34,047 rooms)

Upper midscale: (3.1%/36,718 rooms)

Midscale: (2.5%/12,715 rooms)

Economy: (0.9%/5,830 rooms)