Robust new construction, renovation and conversion announcement activity over the last 12 months

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Over the last 12 months, new hotel construction projects, announced renovations and brand conversions continued to grow, with renovation and conversion activity hitting record highs quarter-over-quarter (QOQ).

At the close of Q1 2023, the new hotel construction pipeline stands at 5,545 projects/658,207 rooms, up 9% by both projects and rooms year-over-year (YOY). Project totals, at Q1 ’23, are only 338 projects, or 5.7%, behind the all-time high of 5,883 projects recorded in Q2 2008. Renovation and brand conversion activity in the U.S. continues to boom, reaching record project counts of 1,953 hotels/253,533 rooms, for a 38% increase by projects and a 37% increase by rooms YOY.

This activity is showing no signs of slowing. Over the last year, new hotel construction projects, renovations and brand conversion announcements have increased significantly. In the past 12 months, 2,986 projects/360,727 rooms have been announced into the pipeline. Over the last four quarters, Lodging Econometrics (LE) has seen, on average, just around 750 announcements QOQ, with the spring and summer quarters having the highest volume of announcement activity.

This announcement activity can be especially important to the lodging industry as it represents immediate sales opportunities for vendors, brand growth opportunities for franchise companies and changing market dynamics for ownership and management groups.

When reviewing markets, over the last 12 months, Texas continues to be a hot spot for new announcement activity, with five of its markets within the top 10 for activity. In the last year, Atlanta led announcements, cumulatively over four quarters, with 78 projects/7,931 rooms. Dallas, the Texas West market (which includes cities like Abilene, El Paso, and Waco) and Houston ranked second, third and fourth for activity with 71 projects/8,561 rooms, 53 projects/4,627 rooms and 51 projects/5,360 rooms, respectively. Behind the three Texas markets were Nashville with 49 projects/6,921 rooms, Inland Empire with 48 projects/4,648 rooms and Phoenix with 46 projects/6,728 rooms. Following Phoenix were two more Texas markets, Austin with 43 projects/5,851 rooms and Texas East (which includes cities like Beaumont and Galveston) with 40 projects/3,478 rooms. San Diego rounded out the top 10 for announcement activity with 38 projects/5,468 rooms.

In total, 54 markets in the U.S. have had 20 or more new construction, renovation and conversion announcements made within the last year. This activity is an indicator that developers are motivated to sign new projects in anticipation of more favorable financing conditions and that owners are eager to complete renovations and conversions, and, most importantly, an indicator of growth within the lodging industry.

For actionable data intelligence on the hotel construction pipeline, brand conversions, announced renovations, sales transactions, or open and operating hotels in the United States or any other region, country, market, or city worldwide, contact Lodging Econometrics (LE) at [email protected] or +1 603.431.8740, ext. 0025.