The total number of projects in the U.S. hotel development pipeline at the end of the third quarter was up 10 percent year over year to more than 5,300, according to a new report from Lodging Econometrics.
The Q3 pipeline increase is one percentage point higher than Q2’s 9 percent growth. Guest-room levels in the pipeline are up by 6 percent year over year to more than 629,000.
According to Lodging Econometrics, at the close of Q3 there was a total of 987 projects with about 135,000 rooms under construction. There are 2,074 projects with nearly 237,000 rooms scheduled to begin construction in the next 12 months—up 14 percent and 13 percent year over year, respectively.
Additionally, projects in the “early planning stage” are up 14 percent and approaching “record highs,” totaling 2,256 projects with more than 257,000 rooms—up 7 percent year over year—according to the company.
“The lodging industry is healthy, and many hotel owners are expected to experience record high revenues in 2022," according to Lodging Econometrics. "As lending rates have changed significantly in 2022 due to the Federal Reserve’s rate increases, ownership and management groups are finding that reinvesting in their current portfolios, whether that be renovating or repositioning to another brand, is a better return on investment right now.”
Marriott Leads in Developments
Brands with the largest third-quarter pipelines in the upper-midscale sector include Home2 Suites by Hilton (494 projects with about 50,800 rooms); IHG Hotels & Resorts’ Holiday Inn Express (297 projects with about 28,300 rooms); and Marriott’s TownePlace Suites (291 projects with more than 27,300 rooms), according to Lodging Econometrics.
Among upscale hotel chains, the report noted Marriott’s Residence Inn and SpringHill Suites led the charge with 234 projects and about 28,700 rooms, and 148 projects with nearly 16,400 rooms, respectively. IHG’s Staybridge Suites follows with 125 projects and nearly 13,000 rooms, the report stated.
As for extended-stay projects—which account for 35 percent of the U.S. pipeline—Hilton's Home2 Suites led at the end of the third quarter with 494 projects and about 50,800 rooms. Marriott's TownePlace Suites and Residence Inn followed with 291 projects and about 27,300 and 234 projects and nearly 28,700 rooms, respectively.
Dallas Dominates, Again
Dallas led in the U.S. with the largest construction pipeline at the end of the third quarter, according to Lodging Econometrics. Dallas accounts for 174 new projects with nearly 20,700 rooms—a record high, according to the report.
Behind Dallas is Los Angeles with 118 projects and about 19,100 rooms; Phoenix with 113 projects and more than 15,500 rooms; and New York City with 102 projects and about 17,800 rooms, the report stated.
Additionally, Dallas had the highest number of projects in the “early planning stage” at 88 with about 9,900 rooms.
“Within the first three quarters of 2022, the markets with the greatest number of new openings are New York City, Austin, Nashville, Atlanta, and Detroit,” according to Lodging Econometrics.
The company also projects New York will have the most new hotel openings in 2022, with 38 new hotels totaling more than 5,000 rooms.
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