In 2025, the United States is set to witness a significant expansion in its hotel industry, with New York City and Nashville leading the growth.
According to CoStar, a prominent provider of commercial real estate data, these cities are projected to open the most hotel rooms in the country.
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Leading cities in hotel room openings
New York City is anticipated to add 5,719 new hotel rooms in 2025. This development aligns with the city’s strong performance in recent years, driven by substantial leisure and business travel.
In both 2023 and 2024, New York reported the highest occupancy levels among US markets. Although there are fewer rooms currently under construction compared to 2023, an increase in rooms in the planning and final planning stages indicates ongoing long-term investment.
Nashville follows with a projected 2,849 new rooms set to open in 2025. The majority of these additions are expected in the Upper Midscale and Upscale categories.
Unlike New York City, Nashville has seen an uptick in construction activity from the previous year, reflecting its growing appeal as a destination.
Overall US hotel industry growth
The broader US hotel industry is also experiencing growth. In 2024, 721 hotels with a total of 73,682 rooms were opened. Projections for 2025 indicate an increase to 953 hotels, adding 108,366 rooms.
Looking ahead to 2026, the industry is expected to see 1,865 new hotels comprising 198,319 rooms. Despite this upward trend, overall US hotel construction activity remains subdued, with many projects still in the planning stages.
Factors such as restrictive capital and lending standards, high interest rates, and elevated construction costs are contributing to a construction volume that remains below the peak levels observed in 2019.
Focus on upper midscale segment
The Upper Midscale segment is leading the current construction efforts. The US is expected to open nearly 34,000 rooms in this category in 2025, reflecting its prominence in the in-construction room count.
This focus suggests a strategic emphasis on catering to a broad spectrum of travelers seeking quality accommodations at moderate price points.
In summary, while challenges persist in the form of financial constraints and construction costs, the US hotel industry is poised for notable growth in the coming years, with New York City and Nashville at the forefront of this expansion.
