According to the third quarter Construction Pipeline Trend Report for the United States from Lodging Econometrics (LE), the U.S. construction pipeline stands at 5,317 projects/629,489 rooms, up 10% by projects and 6% rooms Year-Over-Year (YOY).
At the close of Q3, there are 987 projects/135,050 rooms under construction in the U.S. Projects scheduled to start construction in the next 12 months, stand at 2,074 projects/236,894 rooms, up 14% by projects and 13% by rooms YOY, respectively. Project counts in the early planning stage reached record highs, in Q3, standing at 2,256 projects/257,545 rooms, a 14% increase by projects and 7% increase in rooms YOY.
The lodging industry is healthy, and many hotel owners are expected to experience record high revenues in 2022. As lending rates have changed significantly in 2022 due to the Federal Reserve’s rate increases, ownership and management groups are finding that reinvesting in their current portfolios, whether that be renovating or repositioning to another brand, is a better return on investment right now. At the end of Q3 2022, brand conversion room counts reached record highs of 988 projects/99,474 rooms. The renovation pipeline remained strong as well, with 893 projects/140,440 rooms; some of the highest counts dating back to Q3 2018. Combined, renovation and conversion activity accounts for 1,881 projects/239,914 rooms, up 36% YOY by projects and 50% by rooms YOY.
Travel throughout the U.S., in all segments, saw steady recovery over the summer months and is expected to continue into the fall and winter months. New project announcements and construction starts continue to recover from the lows experienced during the COIVD pandemic. The new construction pipeline in the U.S. continues to grow, albeit, at a moderate, modest pace, with projects in the early planning stage establishing a new peak for this cycle. This peak signals a favorable outlook by developers for development conditions to improve in the near future.
The upper midscale chain scale continues to have the largest project count of all chain scales in the total U.S. construction pipeline at Q3, standing at 2,127 projects/214,473 rooms. Following upper midscale, is upscale which stands at 1,528 projects/202,907 rooms at the close of the quarter. Together, upper midscale and upscale project counts in the pipeline account for 69% of all projects.
The brands with the largest number of projects in the upper midscale chain scale are Home2 Suites by Hilton with 494 projects/50,809 rooms; InterContinental Hotels Group’s (IHG) Holiday Inn Express 297 projects/28,323 rooms; and Marriott’s TownePlace Suites with 291 projects/27,329 rooms. In the upscale chain scale, the top brands are Marriott’s Residence Inn with 234 projects/28,659 rooms, and its SpringHill Suites brand with 148 projects/16,350 rooms, followed by IHG’s Staybridge Suites with 125 projects/12,962 rooms.
At the end of Q3 ’22, 1,846 projects/189,289 rooms in the U.S. Construction Pipeline are extended stay projects; accounting for 35% of projects in the total U.S. pipeline. Home2 Suites by Hilton currently has the largest extended stay pipeline with 494 projects/50,809 rooms. The brand with the second largest number of projects in the extended stay pipeline at Q3 2022, is Marriott’s TownePlace Suites with 291 projects/27,329 rooms, followed by its Residence Inn brand with 234 Projects/28,659 Rooms.
Thus far, throughout 2022, the U.S. opened 343 new hotels, accounting for 39,772 rooms, with another 182 projects/22,261 rooms anticipated to open by the end of the year. This represents a 1.1% increase in new hotel supply for 2022. LE analysts expect new hotel openings to increase in 2023 and 2024, representing a 1.3% supply increase for 2023 and a 1.4% supply increase for 2024.
Related Stories
University Buildings | Oct 18, 2022
A carbon-neutral-ready university campus opens in Hong Kong
In early September, the Hong Kong University of Science and Technology (HKUST) officially opened its new, KPF-designed campus in Nansha, Guangzhou (GZ).
Codes and Standards | Oct 17, 2022
Ambitious state EV adoption goals put pressure on multifamily owners to provide chargers
California’s recently announced ban on the sale of new gas-powered vehicles starting in 2035—and New York’s recent decision to follow suit—are putting pressure on multifamily property owners to install charging stations for tenants.
Justice Facilities | Oct 17, 2022
San Antonio’s new courthouse aims to provide safety and security while also welcoming the public
The San Antonio Federal Courthouse, which opened earlier this year, replaces a courthouse that had been constructed as a pavilion for the 1968 World’s Fair.
Market Data | Oct 14, 2022
ABC’s Construction Backlog Indicator Jumps in September; Contractor Confidence Remains Steady
Associated Builders and Contractors reports today that its Construction Backlog Indicator increased to 9.0 months in September, according to an ABC member survey conducted Sept. 20 to Oct. 5.
| Oct 13, 2022
Boston’s proposed net-zero emissions code has developers concerned
Developers have raised serious concerns over a proposed new energy code by the City of Boston that would require newly constructed buildings over 20,000 sf to immediately hit net-zero emissions goals.
Education Facilities | Oct 13, 2022
A 44-acre campus serves as a professional retreat for public-school educators in Texas
A first-of-its-kind facility for public schools in Texas, the Holdsworth Center serves as a retreat for public educators, supporting reflection and dialogue.
Building Team | Oct 12, 2022
Real estate development practices worsened impact of Hurricane Ian
A century ago, the southwest Florida coast was mostly swamps and shoals, prone to frequent flooding and almost impossible to navigate by boat.
Market Data | Oct 12, 2022
ABC: Construction Input Prices Inched Down in September; Up 41% Since February 2020
Construction input prices dipped 0.1% in September compared to the previous month, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics’ Producer Price Index data released today.
Hotel Facilities | Oct 12, 2022
Global hotel chain citizenM opens its first Chicago property and its fifth of the year
citizenM, a global chain of affordable luxury hotels, has opened its first Chicago property—its fifth opening of 2022.
Building Team | Oct 11, 2022
Associated Materials® Celebrates the Company’s Rich History, Which Began 75 Years Ago with the Founding of Alside
Since its inception in 1947, Alside® has been a leader in innovation and continues this very commitment to excellence – in people, products and services.
