The U.S. hotel pipeline in the second quarter increased 7 percent year over year, with 5,572 projects in the development pipeline, according to a new Lodging Econometrics report. In Q2, Marriott International again reported the largest hotel development pipeline while Dallas swept all other U.S. markets in project counts, according to the report.
In line with Q2 U.S. hotel project growth, rooms in the development pipeline rose 6 percent year over year to more than 660,000 rooms in the second quarter, according to the report.
The second-quarter U.S. hotel development pipeline grew month over month and was 5 percent shy of all-time highs in the second quarter, according to the report. This growth shows developers "continue to believe in the strength of the economy long-term," according to Lodging Econometrics, as they "push through short-term challenges."
Total U.S. hotel projects under construction in the second quarter rose "modestly" quarter over quarter—up 10 percent year over year to 1,062 projects and up 8 percent year over year to nearly 142,000 rooms, according to the report.
Combined, announced U.S. hotel conversions and renovations were at "record high project counts over the last four quarters," according to the report, totaling 1,939 projects and more than 253,000 rooms. Upscale, upper midscale and economy brands accounted for the majority of those projects by the end of Q2, according to Lodging Econometrics.
Additionally, upscale and upper midscale projects are leading the new construction pipeline in the second quarter, accounting for 62 percent of projects and 57 percent of rooms in development. Demand is expected to continue through the summer and fall conference season, according to the report.
Marriott and Dallas Remain Pipeline Leaders
With 1,511 projects and nearly 182,000 rooms in the construction pipeline in the second quarter, Marriott again had the largest pipeline among hotel companies. Hilton Worldwide followed with 1,470 projects and nearly 165,000 rooms, and InterContinental Hotels Group had 811 projects and nearly 81,000 rooms, according to the report. Together, Marriott, Hilton and IHG make up 68 percent of the entire U.S. hotel construction pipeline.
By brand, Home2 Suites by Hilton had a record-high pipeline of 565 projects and nearly 58,000 rooms in Q2, followed by Marriott’s TownePlace Suites' 345 projects and more than 32,000 rooms in the U.S. hotel pipeline in the second quarter. IHG’s Holiday Inn Express followed with 306 projects and nearly 29,000 rooms.
Across the board, Dallas represented the largest development pipeline, according to the report. With a "record-high" 184 projects and more than 21,500 rooms in the pipeline, Dallas was also the top market with the most projects scheduled to start in 12 months (69) and projects in early planning stages (90). Atlanta followed with 141 projects and nearly 18,000 rooms in the pipeline. In Q2, Phoenix had 119 projects and more than 16,000 rooms in the pipeline.
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