The US hotel construction pipeline saw growth in the first quarter of 2025, according to the latest report from Lodging Econometrics (LE). The data reveals that by the end of Q1, there were 6,376 projects in the pipeline, accounting for 749,561 rooms.
This marks a 5% increase in projects and a 6% rise in rooms compared to the same period in 2024.
Increase in projects and rooms under construction
As of Q1 2025, 1,152 hotel projects were under construction in the U.S., totalling 145,368 rooms. This represents a modest increase of 1% in the number of projects and 3% in rooms compared to Q1 2024.
Another significant part of the pipeline is made up of projects scheduled to begin construction in the next 12 months, with 2,286 projects and 263,370 rooms planned for commencement.
Both project and room numbers in this category rose by 1% year-on-year.
The most notable growth, however, occurred in the early planning stage, where project numbers grew by 10% and room numbers rose by 13% compared to the previous year.
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By GlobalDataThere are now 2,938 projects and 340,823 rooms in the early planning phase, indicating an optimistic outlook for the future of the hotel construction industry.
Chain scale trends in the hotel pipeline
The hotel pipeline is heavily concentrated in three main chain scales: upscale, upper midscale, and midscale. At the end of Q1, upscale hotels accounted for 1,443 projects and 179,295 rooms, while upper midscale hotels made up the largest share with 2,338 projects and 226,349 rooms.
Midscale hotels followed with 974 projects and 82,094 rooms. These three categories combined represent roughly 75% of all hotel projects in the U.S. pipeline.
One notable trend is the growth in upper upscale projects, which reached record highs in both the number of projects and rooms. There were 362 upper upscale projects and 70,603 rooms in the pipeline, marking a 10% increase in projects and a 7% rise in rooms from the previous year.
Similarly, midscale chain scale projects also saw record numbers, growing by 10% in projects and 9% in rooms year-on-year.
Growth in hotel conversions and new openings
Hotel conversions and renovations also saw significant growth in Q1 2025. The report shows a record number of conversion projects, with 1,421 projects and 136,668 rooms in the pipeline.
This represents a 13% increase in projects and a 16% increase in rooms compared to Q1 2024. When combined with renovation activity, the total number of projects reached 2,050, involving 269,435 rooms.
In terms of new construction, 313 projects were announced in Q1, comprising 37,912 rooms. The first quarter also saw a 21% increase in the number of projects starting construction compared to the previous quarter, with a 41% rise in rooms.
These figures suggest that developers are maintaining a positive outlook and pushing forward with their current projects.
Looking ahead, 161 new hotels with 18,767 rooms opened across the U.S. between January and March of 2025.
An additional 579 projects, adding 64,781 rooms, are forecast to open by the end of 2025, bringing the total number of new openings for the year to 740 hotels with 83,548 rooms.
This represents a 1.5% growth rate in supply. Further into the future, analysts predict 848 new hotels with 92,892 rooms to open by the end of 2026, resulting in a 1.6% increase in hotel supply.
