US hotel construction pipeline projects up slightly year-over-year

PORTSMOUTH, NH – According to the First Quarter 2022 Construction Pipeline Trend Report for the United States of Housing iconometry (LE), the total construction pipeline in the United States stands at 5,090 projects/606,302 rooms at the end of the first quarter of 2022. LE analysts report that the total construction pipeline in the United States shows a slight increase year-on-year (YOY), up 2% by projects, but down 3% by rooms.

In Q1’22, there are 961 projects/128,784 rooms currently under construction, down 27% by projects and 28% by YOY rooms. Projects scheduled to start in the next 12 months, at 1,911 projects/223,030 rooms, are up 2% per project and 3% per room YOY. Projects and rooms in advance planning hit a record high in the first quarter, amounting to 2,218 projects/254,488 rooms, up 24% per project and 12% per room YOY.

Notably, the high-end and upper-midscale chain ladders dominate the pipeline in Q1 with 63% of the projects in the total pipeline concentrated in these two chain ladders. This has been the case for several years. It should also be noted that there are a total of 1,420 projects/184,692 rooms under renovation or conversion in the United States during the first quarter, and that project conversions and room conversions are reaching a record level and increased by 59% per project and 48% per YOY room.

New projects and development planning that were previously on hold are now receiving the green light from investors and developers with boosted confidence thanks to rather robust domestic leisure travel in the first part of the year. With the increase in domestic leisure travel in the United States, as well as the recovery, albeit slower, of business and group travel, confidence in the recovery is growing. Developers are eager to move forward with their plans and innovate as this upward trend in hotel demand is expected to continue throughout 2022.

Until the end of 2021, the United States has opened 826 projects representing 106,192 rooms. A total of 113 hotels / 12,464 rooms opened in the first quarter of 2022. More than half of these openings 68 hotels / 7,154 rooms were in the suburbs, but 41 hotels / 4,703 rooms of newly opened hotels, or 36% were in a top 25 market. Reflecting the growing number of projects being planned and projects due to start over the next 12 months, LE’s forecast for new hotel openings by project has increased slightly for 2023. For the remainder of the year, LE forecasts 649 other projects / 77,568 rooms to be opened for a total of 762 hotels / 90,032 rooms in 2022, i.e. a 1.6% increase in new hotel supply. In 2023, LE forecasts the opening of 839 hotels/93,169 additional rooms in the United States, for a supply increase of 1.6%.