For another successive quarter, the overall U.S. hotel building and construction pipeline grew to brand-new highs.
In the 2nd quarter of 2024, the overall hotel pipeline reached a record 6,095 jobs, or 713,151 spaces, growing 9% and 8% year over year, respectively, according to a patterns report by Lodging Econometrics. Sequentially, tasks in the pipeline increased 0.5% in the quarter.
Compared to the previous year, tasks currently under building and construction in the quarter increased 10%, while tasks slated to begin building in the next 12 months were up 5%. Tasks in the early preparation phase, on the other hand, increased by 13% year over year in the quarter.
By the numbers
6,095
U.S. hotel tasks in the overall pipeline
+9%
Year-over-year U.S. hotel job development
400
U.S. hotels slated to open by year-end 2024
Extended stay remained “popular” amongst designers in Q2, and the upper midscale and high end sections led others by job count, the report discovered. In addition, Dallas once again topped other U.S. markets for the biggest hotel building and construction pipeline.
Looking towards the 2nd half of 2024, Lodging Econometrics anticipates another 400 hotels will open, bringing the year's overall openings well above 2023 levels.
Dallas leads once again
Dallas led all other U.S. markets for the biggest hotel building and construction pipeline in Q2, with 189 jobs, 4 tasks shy of its record-high at the end of Q4 2023, according to the report. The marketplace kept its lead from Q1, when it likewise had the biggest hotel building pipeline.
Atlanta followed with a record-high 159 tasks, or 18,522 spaces. Inland Empire, California, followed with a record-high 124 tasks; then Nashville with 123 tasks; and Phoenix with 120 jobs.
In the 2nd quarter, Dallas likewise led with the most tasks set up to begin in the next 12 months (73) and the most hotel jobs in the early preparation phase (86 ).
New york city vanquished Dallas for the most hotel tasks currently under building in the quarter. New york city had 46 tasks under building and construction, or 7,572 spaces, while Dallas had 30 tasks, or 3,523 spaces.
When it comes to brand-new tasks revealed throughout the quarter, Atlanta saw the biggest number, with 10 jobs, or 1,140 spaces. Dallas followed carefully behind, likewise with 10 tasks, however a little less spaces at 1,051. Miami, Indianapolis and New Orleans followed after that.
Extended stay, upper midscale control
Throughout all markets, extended stay remained a top priority for designers in Q2. The classification represented 36% of the overall jobs under building and construction, 33% of jobs set up to start within the next 12 months and 34% of jobs in the early preparation phase. Some 64% of the jobs in the prolonged stay pipeline were for middle-tier brand names, according to Lodging Econometrics.
Numerous significant hotel business are broadening in midscale, consisting of Marriott International, which began on its inaugural Studio Res hotel previously this year. Marriott initially released the brand name in June 2023, going into the U.S. midscale prolonged stay sector.
Hyatt, on the other hand, is underway on the very first hotel for its upper midscale prolonged stay brand name, Hyatt Studios. And Wyndham Hotels & & Resorts opened its very first Echo Suites extended stay hotel previously this month, with strategies to substantially scale the brand name.
Lodging Econometrics discovered that the upper midscale chain scale led all other sections in the overall pipeline for the biggest job count, with 2,262 jobs, or 219,547 spaces. The high end section followed, with 1,417 jobs in the pipeline, or 175,343 spaces. Together, the upscale and upper midscale sections consisted of 60% of all jobs in the overall pipeline, according to the report.
One hotel business tactically broadening in upscale is Choice Hotels International. In the 2nd quarter, Choice continued its section push with a Cambria opening.
Openings introduction
Over half of the hotels that have actually currently opened in 2024 are high end and upper midscale, according to Lodging Econometrics, which anticipates that the 2 sectors will have the greatest development rates through 2026.
In the very first half of this year, 250 hotels with 29,777 spaces opened throughout the U.S., the report discovered.
Lodging Econometrics expects an extra 400 tasks, or 44,451 spaces, will open through the rest of 2024, bringing the year's openings total to 650 hotels with 74,228 spaces.
New York City is anticipated to open the most hotels (23) by year-end, followed by Dallas (16 ), Atlanta (15 ), Inland Empire (14) and Orlando (13 ).
The year-end 2024 projection represents a 35% boost above the variety of hotel openings in 2023, which stood at 480 hotels, or 60,922 spaces, according to the report.
Looking ahead, Lodging Econometrics experts anticipate there will be 779 U.S. hotel openings in 2025 and 928 openings in 2026, representing a 1.8% boost in brand-new supply.
One significant job slated to open in 2025 is the $1 billion VAI Resort in the Phoenix city.
Find out more
