More than 590,000 hotel rooms are currently in the US pipeline
The global COVID-19 pandemic may have put a lot of our travel dreams on pause over the last 19 months, especially during the early months and when new variants started to spread across the globe. But while many of us were stuck at home, hotel brands around the world continued to plot their growth for when people could travel again.
Now, as we're entering the home stretch of 2021, new data from Lodging Econometrics, a group offering hotel development services and lodging reports, shows exactly what hotels here in the U.S. have been doing.
According to the report, in the third quarter of 2021, there are currently 4,837 hotel projects in the pipeline, equaling 592,259 rooms. Despite the fact those numbers represent an 8% decrease in projects and 10% decrease by rooms year-over-year, having a half-million new hotel rooms scattered across the country is still a significant number considering what the industry has gone through.
Out of the new properties, major cities have a significant number of projects in the works, with southern cities like Dallas, Atlanta and Houston, along with the country's two largest cities, New York and Los Angeles, representing the top five.
Here's exactly how many projects and rooms these cities have in the pipeline as of Q3:
- Dallas: 147 projects/17,711 rooms
- Atlanta: 139 projects/8,659 rooms
- Los Angeles: 133 projects/22,145 rooms
- New York City: 130 projects/22,417 rooms
- Houston: 90 projects/9,225
Together, these five cities represent 13% of projects and 15% of rooms in the total U.S. pipeline, according to Lodging Econometrics.
In the Dallas area alone, The Dallas Morning News reports 48 new hotels are scheduled to start construction in the next 12 months.
Planning, building and opening new hotels is a long-term game. According to Lodging Econometrics, "many developers really do have a long-term positive outlook on hotel development as projects in the early planning stage are up considerably, with 1,978 projects/239,831 rooms, a 27% increase by projects, and 25% by rooms YOY and reaching a cyclical peak this quarter."
Despite the future-looking optimism, the total number of hotels actually under construction at the end of Q3 was down. Most of that decrease can be attributed to hotels that have been completed and opened but it is also due to some COVID-era problems like labor and supply issues.
"Presently, inflation and the increasing cost and sourcing of labor and materials, combined with supply chain shortages and delays, continue to be a major variable for hotel development," the report says. "In response, developers are reworking budgets, revising plans to minimize costs, and adjusting construction start and project opening dates to endure the challenges of a recovering industry."
Of the new hotels under construction in the U.S., Marriott is leading the way with 1,286 projects/166,174 rooms, followed by Hilton with 1,223 projects/139,742 rooms and IHG with 769 projects/77,558 rooms. Together these three companies represent a whopping 68% of all projects in the U.S. construction pipeline.
Breaking it down even further, three mid-market, limited-service brands, make up 20% of the hotels in the total construction pipeline:
- Home2 Suites by Hilton, 402 projects/41,846 rooms
- Holiday Inn Express (IHG), 301 projects/28,852 rooms
- Fairfield Inn (Marriott), 246 projects/23,653
Hyatt, whose specific data was not included in the Lodging Econometrics reporting, has roughly 98 hotels in the U.S. pipeline, according to the brand's development page. Just this week, Hyatt closed its deal to buy Apple Leisure Group, adding roughly 100 new properties around the world to the World of Hyatt program, plus a number of pipeline projects in the Americas and Europe.
The good news for travelers is that in 2021, 665 new hotels opened in the U.S through the third quarter, with another 221 projected to open by the end of the year. Analysts at Lodging Econometrics expect 970 hotels to open in 2022 and 961 to open in 2023.
Of course, with so many new hotels on the horizon, we're here to help you cut through the clutter to decide which ones are worthy of your hard-earned cash and points. We've been rounding up our favorite hotel openings this fall, summer and spring, as well as what's (hopefully) coming before we ring in the new year.
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