SHERIDAN, WYOMING – Feb. 14, 2025 – A tremendous surge in the U.S. hotel development pipeline marked the final quarter of 2024, with the pipeline hitting unprecedented levels across the country. Recent analysis and reports from Lodging Econometrics (LE) reveals the total hotel construction pipeline has swelled to 6,378 projects encompassing 746,986 rooms, marking year-over-year (YOY) increases of 7% and 8% respectively. This continues an upward trajectory that began in the fourth quarter of 2021.
Vigorous Activity Across All Project Stages
The construction pipeline shows vigorous activity throughout all project stages. Hotels under construction currently stands at 1,149 projects with 142,238 rooms, demonstrating strong YOY project growth. The near-term outlook remains promising, with 2,259 projects containing 259,108 rooms slated to start construction anytime within the next 12 months. Perhaps most notably, early planning has reached extraordinary levels, with 2,970 projects and 345,640 rooms, and remarkable YOY growth of 15% in projects and 19% in rooms.
Upper-Midscale Dominance
Breaking down hotel construction by chain scales, the upper-midscale chain scale dominates with 2,354 projects totaling 227,845 rooms—a new record for this chain scale. Upscale follows with 1,471 projects and 182,474 rooms. The midscale chain scale has achieved new heights with 957 projects comprising 80,436 rooms, while the upper-upscale chain scale reached a milestone of 338 projects by the fourth quarter’s end. The economy sector rounds out the pipeline with 361 projects and 34,099 rooms. Lastly, there are 90 luxury projects incorporating 20,878 rooms at the Q4 ’24 close.
Upper-Midscale and Upscale Lead Construction
Hotel construction in the U.S. continues to be dominated by upper-midscale and upscale properties across all project stages. In projects currently under construction, upper-midscale hotels lead with 382 projects totaling 37,005 rooms, representing 33% of all ongoing construction. The upscale segment follows with 297 projects, and together these two chain scales make up approximately 60% of all hotels under construction.
Upcoming Developments
Looking at hotels scheduled to start construction anytime over the next 12 months, upscale and upper-midscale projects maintain their dominance, accounting for 68% of upcoming developments.
Early Planning Activity
The upper-midscale chain scale leads early planning activity with 1,082 projects (105,546 rooms), comprising 36% of all projects in this stage. Adding the projects from both upscale and midscale segments, which together contribute 1,012 projects, demonstrates strong activity within in these chain scales. Collectively, these three chain scales—upper-midscale, upscale and midscale—make up 71% of all projects in the early planning stage.
Recent Supply Growth Trends
When looking at supply growth over the last few years, the 2021-2024 hotel chain scale supply growth rates reflect a complex narrative shaped by pre-COVID construction pipelines coming to fruition. The notably high 2021 supply growth rates—particularly in luxury (4%) and upscale (4.1%) chain scales—largely represent the completion of projects that broke ground before the pandemic rather than new post-COVID development. As these pre-pandemic projects were completed, growth rates normalized to more modest levels from 2022 onward. The luxury segment settled at 2.3% by 2024, while upscale stabilized around 1.8%. Upper-midscale properties demonstrated resilience with consistent supply growth between 1.6-1.8% from 2022-2024, and midscale showed gradual recovery from 0.9% in 2022 to 1.4% in 2024. Economy properties maintained supply growth rates below 1% throughout the period. The overall U.S. hotel industry supply growth pattern—dropping from 2% in 2021 to around 1-1.2% in subsequent years—reflects this transition from pre-pandemic project completion to new post-COVID development rates.
Future Projections
As we look ahead, LE projects these stabilized supply growth rates to continue. In 2025, LE is forecasting 730 new hotels and 82,538 rooms to open, which will correlate into a 1.5% increase in supply. Growth is forecast to accelerate in 2026, with 904 new hotels and 97,328 rooms scheduled to open, which would further boost the national supply by 1.7%.
About Lodging Econometrics
Transform your hotel industry insights with Lodging Econometrics (LE), your source for real-time, actionable hotel development intelligence and decision-maker contacts globally. Our unrivaled database delivers precise tracking of hotel construction pipelines, renovations, conversions, and sales transactions – from breaking ground to opening. Whether you’re targeting specific markets or chain scales in the United States or exploring opportunities worldwide, LE’s verified data connects you directly with key decision-makers, including developers, owners, management groups, and development project team members.
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