LE: Dallas and Marriott lead U.S. hotel construction pipeline in the second quarter

Marriott, Hilton lead among brands in the construction pipeline

U.S. hotel construction pipeline
Dallas had a record 173 projects with 20,707 rooms in the second quarter of this year, according to Lodging Econometrics.

DALLAS LEADS THE U.S. hotel construction pipeline for the fourth consecutive quarter, according to Lodging Econometrics. Among brands, Marriott International led the pipeline.

Dallas had a record 173 projects with 20,707 rooms in the second quarter of this year, followed by Atlanta with 140 projects containing 18,131 rooms, Los Angeles with 124 projects with 20,365 rooms, New York, with 113 projects with 19,238 rooms and Phoenix with 108 projects containing 14,964 rooms,

Marriott had 1,355 projects with 167,034 rooms, up 4 percent by projects year-over-year, tops the pipeline during the period.

The Q2 2022 U.S. Construction Pipeline Trend Report said that major markets and popular tourist destinations in the U.S. reported highest occupancy rates since the pandemic began in early 2020 in the second quarter mainly due to robust leisure travel, group, and international travel.

New York City with 78 projects with 13,063 rooms, Atlanta with 25 projects containing 3,905 rooms, Dallas with 25 projects with 3,725 rooms, Phoenix with 23 projects with 4,955 rooms and Los Angeles with 22 projects with 3,606 rooms are the top five markets with the most projects under construction during the end of June. They account for 22 percent of rooms under construction in the U.S.

According to LE, Atlanta has the most projects scheduled to start in the next 12 months, with 62 projects containing 8,020 rooms. It is followed by Atlanta and Dallas, with 55 projects with 6,465 rooms respectively.

Phoenix with 49 projects with 5,968 rooms, Houston with 45 projects containing 4,619 rooms and Los Angeles with 43 projects with 6,715 rooms are the next major markets.

Dallas has the most projects in early planning with 93 projects containing 10,517 rooms, followed by Los Angeles with 59 projects with 10,044 rooms, Atlanta with 53 projects containing 6,206 rooms, Orlando with 44 projects with 7,640 rooms and Washington DC with 40 projects with 5,659 rooms.

Most new projects were announced in Dallas in the second quarter with 16 projects containing 1,654 rooms. Atlanta followed with 11 projects with 1,206 rooms, the Inland Empire CA with 11 projects containing 1,113 rooms, Houston with 9 projects with 929 rooms, and Charlotte with 9 projects with 916 rooms.

LE report revealed that a total of 1,889 projects with 237,420 rooms are currently in the renovation and conversion pipeline. Houston tops the list in this segment with 42 projects containing 4,666 rooms, followed by Atlanta with 39 projects with 5,246 rooms, Chicago with 34 projects with 4,908 rooms, Dallas with 30 projects with 3,785 rooms, and San Diego with 28 projects containing 4,753 rooms.

Twenty-six percent of new hotels are expected to open in New York, Austin, Atlanta, Los Angeles, Nashville, Detroit, and the Inland Empire in the second half of the year. In the second quarter, the top 25 markets in the U.S. are forecast to open 46 percent of the rooms by year-end.

Among top 50 markets, New York City is forecast to open 58 projects with 8,329 rooms this year, followed by Austin with 25 projects containing 3,291 rooms, Atlanta with 22 projects with 2,598 rooms, Los Angeles with 18 projects containing 3,191 rooms, and then Nashville with 17 projects with 2,630 rooms. As many as 151 projects with 18,966 rooms were opened in the first half of 2022 in the top 50 markets, and another 252 projects with 33,948 rooms are expected to open in the remaining two quarters, which will take the total to 403 projects with 52,914 rooms by year-end.

LE predicts that 366 projects accounting for 46,176 rooms will be opened in 2023  within the top 50 markets, with a growth rate of 1.7 percent, and 402 new hotel projects with 47,065 rooms in 2024, with similar growth rate.

Marriott, Hilton lead among brands

According to LE, projects by Marriott International leads U.S. hotel construction pipeline among franchise companies.

It is followed by Hilton Worldwide with 1,312 projects containing 147,780 rooms, an 8 percent year-over-year increase, and InterContinental Hotels Group with 789 projects with 79,701 rooms, up 2 percent by projects year-over-year. They comprise 66 percent of the projects and 64 percent of the rooms in the pipeline in the first half of this year.

Marriott has the most projects under construction and scheduled to start within the next 12 months, with 249 projects with 33,398 rooms and 653 projects with 80,395 rooms respectively. Hilton has the most projects in the early planning stage of the pipeline, with 725 projects containing 78,879 rooms, together they account for a record 32 percent of projects in the early planning stage.

Home2 Suites by Hilton leads among brands in the pipeline with 465 projects with 47,825 rooms, followed by Holiday Inn Express by IHG with 299 projects containing 28,598 rooms. Hilton’s Hampton by Hilton with 281 projects with 28,591 rooms, Marriott’s TownePlace Suites with 270 projects containing 25,340 rooms and Fairfield Inn brand with 235 projects with 21,885 rooms are next in the list.

During the first half, 247 hotels with 28,116 rooms opened across the U.S. Marriott, Hilton, and IHG branded hotels accounted for 70 percent with 172 new hotel openings and 20,365 rooms.

Marriott opened 78 new hotels with 9,475 rooms, Hilton opened 64 new hotels containing 7,901 rooms and IHG opened 30 new hotels with 2,989 rooms. LE said that they will open another 248 hotels with 30,756 rooms by the end of 2022.

According to LE, Marriott will open 169 new hotels with 21,834 rooms this year, up 2.5 percent, followed by Hilton with 150 new hotels containing 17,698 rooms, an increase of 2.3 percent, followed by IHG with 101 new hotels with 11,589 rooms, with a growth rate of 2.7 percent.

Marriott is expected to open another 181 new hotels with 21,850 rooms next year, up 2.4 percent, Hilton will open 154 new hotel projects containing 18,974 rooms, up 2.5 percent, IHG top open 153 new hotels accounting for 15,650 rooms, with a growth rate of 3.6 percent in 2023.

In 2024, Marriott is forecast to open 227 projects with 26,807 rooms, up 2.9 percent,  Hilton is expected to open 189 new hotels with 20,048 rooms, an increase of 2.5 percent, and IHG is expected to open 202 new projects with 19,781 rooms, up 4.4 percent, according to LE forecast.

The recent LE report said that U.S. hotel construction pipeline continued its growth at the end of the second quarter of 2022 with 5,220 projects with 621,268 rooms.