Lodging Econometrics: 43% of U.S. Hotel Construction Projects are Upper-Midscale

PORTSMOUTH, NH—Analysts at Lodging Econometrics (LE) report that together the upper-midscale and upscale pipelines comprise 72% of all projects in the total pipeline.

The upper-midscale category, including unbranded projects, has 2,278 projects/233,150 rooms and is the largest chain scale in the U.S. construction pipeline. The second largest chain scale including unbranded is the upscale category, which has 1,529 projects/208,334 rooms.

“There are a number of reasons why the upper-midscale segment comprises 43% of the projects in the United States construction pipeline,” said J.P. Ford, SVP/director of business development of Lodging Econometrics. “Generally, the brands that have significant pipelines in this chain scale tend to have wide consumer appeal, and strong 800 reservation systems and reward programs, which makes them attractive to investors and developers. Comparatively speaking, these developments are easily financeable, and most of the time that can be accomplished locally. Thirdly, these projects are relatively easy to build and operate, because their food and beverage components are systematized.”

The brands with the largest number of projects in upper-midscale are IHG’s Holiday Inn Express with 438 projects/40,657 rooms; and from Hilton: Home2 Suites 377 projects/39,474 rooms; and Hampton Inn & Suites with 316 projects/32,132 rooms. In upscale, the largest brand pipelines belong to Marriott’s Residence Inn with 200 projects/24,978 rooms; SpringHill Suites with 176 projects/20,124 rooms; and IHG’s Staybridge Suites with 139 projects/14,740 rooms.