The total U.S. construction pipeline stands at 5,090 projects/606,302 rooms at the end of the first quarter of 2022, according to the Q1 2022 Construction Pipeline Trend Report for the U.S. from Lodging Econometrics (LE). LE analysts report that the total U.S. construction pipeline shows a small increase year-over-year (YOY), up 2% by projects, but down 3% by rooms.
At Q1, there are 961 projects/128,784 rooms currently under construction, down 27% by projects and 28% by rooms YOY. Projects scheduled to start in the next 12 months, at 1,911 projects/223,030 rooms, are up 2% by projects and 3% by rooms YOY. Projects and rooms in early planning reached a record high in the first quarter, standing at 2,218 projects/254,488 rooms, up 24% by projects and 12% by rooms YOY.
Notably, the upscale and upper-midscale chainscales dominate the pipeline in Q1 with 63% of projects in the total pipeline concentrated in these two chainscales. This has been the case for several years. Also of note, there are a total of 1,420 projects/184,692 rooms in the renovation or conversion pipeline in the U.S. during the first quarter, and project conversions and room conversions reaching an all-time high and increasing 59% by projects and 48% by rooms YOY.
New projects and development planning that was previously on hold are now getting the green light from investors and developers with buoyed confidence thanks to rather robust domestic leisure travel during the first part of the year. With stronger domestic leisure travel in the U.S., along with the albeit slower revival of corporate and group travel, there is growing confidence in the recovery. Developers are eager to move forward with plans and break ground as this upward trend in hotel business demand is expected to continue throughout the year.
Through year-end 2021, the U.S. opened 826 projects accounting for 106,192 rooms. A total of 113 hotels/12,464 rooms opened in the first quarter of 2022. More than half of these opens, 68 hotels/7,154 rooms, were in suburban locations, but 41 hotels/4,703 rooms of newly opened hotels, or 36%, were in a top 25 market. Reflective of the increasing number of projects in early planning and projects scheduled to start in the next 12 months, LE’s forecast for new hotel openings by projects has risen ever so slightly for 2023. For the remainder of the year, LE forecasts another 649 projects/77,568 rooms to open for a total of 762 hotels/90,032 rooms in 2022, representing a 1.6% increase in new hotel supply. In 2023, LE forecasts an additional 839 hotels/93,169 rooms will open in the U.S., for a 1.6% supply increase.