Vishnu Rageev R is a journalist with more than 15 years of experience in business journalism. Before joining Asian Media Group in 2022, he worked with BW Businessworld, IMAGES Group, exchange4media Group, DC Books, and Dhanam Publications in India. His coverage includes industry analysis, market trends and corporate developments, focusing on retail, real estate and hospitality. As a senior journalist with Asian Hospitality, he covers the U.S. hospitality industry. He is from Kerala, a state in South India.
THE U.S. HOTEL construction pipeline grew 9 percent by both projects and rooms year-over-year, according to the latest U.S. Construction Pipeline Trend Report from Lodging Econometrics. It stood at 5,545 projects with 658,207 rooms at the close of the first quarter of 2023.
Meanwhile, the hotel construction pipeline in the top 25 markets in the U.S. also registered year-over-year growth in the first quarter. Dallas had a record 184 projects with 21,810 rooms at the close of the first quarter, followed by Atlanta with 144 projects containing 18,242 rooms, Los Angeles tally stood at 118 projects with 19,066 rooms, Phoenix with 117 projects with 16,100 rooms and Nashville had 115 projects containing 15, 354 rooms, LE report revealed.
In another report, LE analysts also detailed the leading franchise companies and their brands in the construction pipeline at the close of the first quarter. Marriott International tops the charts with 1,499 projects containing 181,377 rooms, followed closely by Hilton Worldwide, with a record-high count of 1,436 projects with 161,359 rooms, and then InterContinental Hotels Group (IHG) with 809 projects containing 80,679 rooms. Combined, these three franchise companies comprise 68 percent of the projects in the total U.S. pipeline, LE said.
Total projects tally
Project totals for the first quarter are just 338 projects, or 5.7 percent, behind the all-time high of 5,883 projects recorded in the second quarter of 2008, LE said in the report. At the close of the first quarter, projects currently under construction stand at 1,051 projects with 140,365 rooms, each showing 9 percent growth YOY.
Projects scheduled to start construction in the next 12 months are at 2,060 projects with 241,568 rooms, each up 8 percent YOY. Projects in the early planning stage account for 44 percent of the projects in the total U.S. construction pipeline in the first quarter. Early planning projects increased 10 percent YOY, setting an all-time high of 2,434 projects with 276,274 rooms.
Boon for growth
According to the report, this is the fourth consecutive quarter of total pipeline growth for the U.S., which can be, in part, attributed to the robust recovery of travel demand.
“Increased consumer confidence and spending activity has fueled strong occupancy and rate growth throughout the last 12 months as well,” LE analysts said. “Developers are motivated to sign new projects anticipating more favorable financing conditions in the coming quarters. Owners are eager to wrap up existing brand conversion and renovation projects, which have been a substantial focus for many quarters now.”
LE analysts said the U.S. hotel construction pipeline is expected to grow modestly or just incrementally through 2023. “There are no growth spikes expected this year. The pipeline is back loaded, meaning there is ample opportunity for vendors/suppliers in the industry, and third party management companies,” the report further added.
At the first quarter close, 62 percent of projects in the total pipeline are concentrated within the upscale and upper-midscale chain scales, the analysts said. “These two chain scales continue to dominate the pipeline and that is not expected to change anytime soon.”
STR’s recent U.S. hotel construction data also projected confidence in the future of business travel. STR said the hotel property types most associated with business travel, upper upscale hotels, are well represented in the U.S. hotel construction pipeline.
Renovation boom
According to LE, renovation and brand conversion activity in the U.S. continues to boom in early 2023, reaching record project counts of 1,953 hotels/253,533 rooms, for a 38 percent YOY increase by projects and a 37 percent YOY increase by rooms.
LE expects renovation and conversion activity to continue into 2023 as owners spend to bring their hotels into alignment with current brand standards or look elsewhere for new brand identification.
A total of 103 new hotels with 11,762 rooms opened in the U.S. in the first quarter. For the remainder of the year, LE forecasts another 493 new hotel projects with 59,355 rooms to open, representing a combined 1.3 percent supply growth rate in 2023.
LE analysts expect the upward growth in new hotel openings to continue with an additional 699 new hotel projects with 81,574 rooms anticipated to open in 2024, for a 1.4 percent supply increase.
Key markets
According to LE, markets with the greatest number of projects already under construction are New York with 54 projects containing 8,682 rooms, Atlanta with 26 projects with 4,278 rooms, and the Inland Empire with 26 projects with 2,584 rooms.
Dallas has 25 projects containing 3,739 rooms, while Phoenix has 24 projects with 5,155 rooms projects presently under construction, LE report said. “Dallas has the most projects scheduled to start in the next 12 months with 70 projects containing 8,076 rooms, followed by Atlanta with 61 projects with 7,464 rooms, Los Angeles with 45 projects with 6,894 rooms, Phoenix with 45 projects with 5,472 rooms, and then the Inland Empire with 41 projects having 4,173 rooms.”
Nationally, early planning projects and room counts hit a new all-time high in the first quarter with 2,434 projects containing 276,274 rooms. Year-over-year, the Top 25 markets in the U.S., as a group, have seen a 10 percent growth in early planning projects, LE report added.
The markets with the most projects in early planning at the close of the first quarter are again led by Dallas with 89 projects with 9,995 rooms, followed by Nashville with 59 projects containing 7,182 rooms, Atlanta with 57 projects with 6,500 rooms, Los Angeles with 56 projects with 9,433 rooms, and Phoenix with 48 projects containing 5,473 rooms.
Meanwhile, the markets with the largest count of combined renovation and conversion projects are Atlanta with 41 projects containing 4,427 rooms, Houston with 38 projects with 3,969 rooms, Chicago with 34 projects having 4,572 rooms, Dallas with 31 projects with 3,807 rooms, then San Diego with 28 projects containing 4,238 rooms, LE said.
New launches rise
According to the report, new project announcements have been slow to return to pre-pandemic project counts. However, construction starts in the total U.S. pipeline rose 20 percent by projects and 30 percent by rooms year-over-year
In the first quarter, Nashville has the highest number of new projects announced into the pipeline with 14 projects with 1,847 rooms. Dallas follows with 11 projects with 1,576 rooms, then Atlanta with 10 projects containing 1,146 rooms, Austin with 9 projects with 1,201 rooms, and Phoenix with nine projects containing 885 rooms.
LE is forecasting the top 50 markets to open 319 new hotels with 42,743 rooms in 2023. LE analysts anticipate that new hotel openings will continue to rise within the top 50 U.S. markets, forecasting 327 new hotels containing 43,525 rooms to open through 2024.
In the 2023 forecast, LE analysts expect New York to lead with the highest number of new hotels to open with 43 accounting for 7,219 rooms, followed by Dallas with 14 new hotel projects with 2,268 rooms, and the Inland Empire with 14 new hotels containing 1,377 rooms.
For 2024, LE analysts forecast the Inland Empire to open the most new hotels, with 22 new hotel projects containing 2,191 rooms expected to open. Further, Atlanta is forecasted to open 21 new hotel projects with 3,356 rooms in 2024, then Dallas with 18 new hotel projects containing 1,973 rooms.
Marriot leads
Marriott International has the most projects and room counts in each stage of the pipeline at Q1, with 279 projects containing 38,156 rooms currently under construction, 763 projects with 90,038 rooms scheduled to start construction in the next 12 months, and 457 projects with 53,183 rooms are in early planning stage, LE said in its report.
The leading brands by project count for the three companies with the largest pipelines in the U.S. at Q1 are Home2 Suites by Hilton Worldwide with all-time highs by projects and rooms of 546 projects containing 56,001 rooms, Marriott’s TownePlace Suites, also reaching all-time highs by projects and rooms at Q1, with 333 projects with 31,068 rooms, and IHG’s Holiday Inn Express brand with 301 projects containing 28,371 rooms. These three brands collectively represent 21 percent of the projects in the total U.S. hotel construction pipeline at the close of first quarter, LE report added.
LE recorded record-high conversion pipeline totals of 1,079 projects with 110,084 rooms for the U.S. in the first quarter of 2023. Of these conversion totals, Hilton had the most conversion projects and room totals ever recorded by LE with 105 projects containing 14,456 rooms, similarly, Marriott had a record 100 conversion projects, accounting for 13,465 rooms, and IHG had 52 conversion projects with 6,2543 rooms. These three franchise companies account for 31 percent of all the rooms in the conversion pipeline across the country.
According to LE, the franchise companies with the greatest number of new project announcements in the first quarter were: Hilton with 110 projects containing 11,790 rooms, Marriott with 61 projects with 6,730 rooms, and IHG with 33 projects containing 3,103 rooms. These companies represent 60 percent of all new projects announced in the U.S. in Q1 2023.
In the first quarter of 2023, Marriott opened 33 new hotels with 3,711 rooms. Hilton opened 24 new hotels with 2,781 rooms, and IHG opened six new hotels with 629 rooms. The LE forecast for new hotel openings in 2023 anticipates that Marriott will open a total of 152 new hotel projects with 19,064 rooms by year-end, Hilton is forecasted to open 141 new hotel projects with 16,980 rooms in 2023, and IHG is expected to open 88 new hotel projects with 9,975 rooms. These three franchise companies collectively account for 64 and 65 percent, respectively, of new hotel projects and rooms forecast to open in 2023, LE added.
More than 70 percent expect a RevPAR increase in Q4, according to HAMA survey.
Demand is the top concern, cited by 77.8 percent, up from 65 percent in spring.
Only 37 percent expect a U.S. recession in 2025, down from 49 percent earlier in the year.
MORE THAN 70 PERCENT of respondents to a Hospitality Asset Managers Association survey expect a 1 to 3 percent RevPAR increase in the fourth quarter. Demand is the top concern, cited by 77.8 percent of respondents, up from 65 percent in the spring survey.
HAMA’s “Fall 2025 Industry Outlook Survey” found that two-thirds of respondents are pursuing acquisitions, 80 percent plan renovations in the coming year and 57 percent are making or planning changes to brand affiliation or management strategies.
“With hopes high for a stronger fourth quarter, hotel asset managers continue to maintain an optimistic outlook,” said Chad Sorensen, HAMA president. “More than 70 percent of our members expect RevPAR to increase 1 to 3 percent and two-thirds are pursuing acquisitions. With 80 percent planning renovations in the coming year, we see an engaged community focused on performance.”
Conducted among 81 HAMA members, about one-third of the association, the survey reports expectations for revenue growth, property investments and acquisitions.
However, the top three most concerning issues were demand, ADR growth and tariffs, HAMA said.
RevPAR growth forecast
Looking into 2026, 72.8 percent expect 1 to 3 percent growth, 18.5 percent expect 4 to 6 percent, 7.4 percent anticipate flat results and 1.2 percent project a decline. Full-year RevPAR projections versus budget are more mixed: 49 percent expect 1 to 3 percent growth, 17 percent expect flat results, 12 percent expect 4 to 6 percent growth, 2 percent expect 7 percent or more and 19 percent expect declines.
Hotel asset managers note several market pressures, the report said. Other concerns include ADR growth at 51.9 percent, tariffs at 34.6 percent, wage increases at 33.3 percent and potential Federal Reserve rate changes at 32.1 percent. Management company performance at 25.9 percent, immigration and labor trends, union activity and insurance costs were also mentioned.
“The industry is at its highest level of concern around maintaining or increasing rates,” Sorensen said. “There’s pressure to build on the P&L going into 2026.”
Performance projections
Confidence in the broader economy has increased since spring, the survey found. Only 37 percent of respondents expect a U.S. recession in 2025, down from 49 percent earlier in the year.
When asked about properties exceeding gross operating profit forecasts, 59 percent of managers expect 0 to 25 percent of their hotels to surpass targets, 25 percent expect 26 to 50 percent, 10 percent expect 51 to 75 percent and 6 percent expect 76 to 100 percent. Additionally, 20 percent reported returning hotels to lenders or entering forced sales since the spring survey.
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Hersha Hotels & Resorts sold The Boxer Boston to Eurostars Hotels.
The company acquired the property in 2012 for $12.6 million.
The property now sold for $23.6 million.
HERSHA HOTELS & RESORTS sold The Boxer Boston, an 80-room hotel in Boston’s West End, to Eurostars Hotels, part of Spain’s Grupo Hotusa. The company, which reportedly acquired the property in 2012 for $12.6 million, received $23.6 million for it.
The seven-story hotel, built in 1904, is near TD Garden, the Charles River Esplanade, One Congress, North Station and Massachusetts General Hospital, said JLL Hotels & Hospitality, which brokered the sale. It also has a fitness center.
Hersha Hotels & Resorts is part of the Hersha Group, founded in 1984 by Hasu Shah. Jay Shah serves as senior advisor and his brother Neil Shah is president and CEO.
JLL Managing Director Alan Suzuki, Senior Director Matthew Enright and Associate Emily Zhang represented the seller.
"The Boxer’s prime location at the crossroads of Boston's West End, North End and Downtown districts, combined with its strong cash flow and its unencumbered status regarding brand and management, made this an exceptionally attractive investment," said Suzuki. "Boston continues to demonstrate resilient lodging fundamentals driven by its diverse demand generators, including world-class educational institutions, medical facilities, corporate presence and convention and leisure attractions."
The property will become the Spanish hotel chain Eurostars’ fifth U.S. hotel, supporting the group’s North American expansion, the statement said.
Amancio López Seijas, president of Grupo Hotusa and Eurostars Hotels Co., said the addition of Eurostars’ The Boxer strengthens the company’s presence in key locations and promotes urban tourism.
Peachtree recognized by Inc. and the Atlanta Business Chronicle.
Named to the 2025 Inc. 5000 list for the third year.
Chronicle’s Pacesetter Awards recognize metro Atlanta’s fastest-growing companies.
PEACHTREE GROUP ENTERED the 2025 Inc. 5000 list for the third consecutive year. The company also won the Atlanta Business Chronicle Pacesetter Awards as one of the city’s fastest-growing private companies.
The Inc. 5000 list provides a data-driven look at independent businesses with sustained success nationwide, while the Business Chronicle’s Pacesetter Awards recognize metro Atlanta’s fastest-growing privately held companies, Peachtree said in a statement.
“We are in the business of identifying and capitalizing on mispriced risk, and in today’s environment of disruption and dislocation, that has created strong tailwinds for our growth,” said Greg Friedman, managing principal and CEO. “These recognitions validate our ability to execute in complex markets, and we see significant opportunity ahead as we continue to scale our platform.”
The Atlanta-based investment firm, led by Friedman; Jatin Desai, managing principal and CFO and Mitul Patel, principal, oversees a diversified portfolio of more than $8 billion.
A PETITION FOR a referendum on Los Angeles’s proposed “Olympic Wage” ordinance, requiring a $30 minimum wage for hospitality workers by the 2028 Olympic Games, lacked sufficient signatures, according to the Los Angeles County Registrar. The ordinance will take effect, raising hotel worker wages from the current $22.50 to $25 next year, $27.50 in 2027 and $30 in 2028.
Mandatory health care benefits payments will also begin in 2026.
The L.A. Alliance for Tourism, Jobs and Progress sought a referendum to repeal the ordinance, approved by the city council four months ago. The petition needed about 93,000 signatures but fell short by about 9,000, according to Interim City Clerk Petty Santos.
The council approved the minimum wage increase for tourism workers in May 2023, despite opposition from business leaders citing a decline in international travel. The ordinance requires hotels with more than 60 rooms and businesses at Los Angeles International Airport to pay workers $30 an hour by 2028. It passed on a 12 to 3 vote, with Councilmembers John Lee, Traci Park and Monica Rodriguez opposed.
The L.A. Alliance submitted more than 140,000 signatures in June opposing the tourism wage ordinance, triggering a June 2026 repeal vote supported by airlines, hotels and concession businesses.
AAHOA called the ruling a setback for Los Angeles hotel owners, who will bear the costs of the mandate.
"This ruling is a major setback for Los Angeles' small business hotel owners, who will shoulder the burden of this mandate," said Kamalesh “KP” Patel, AAHOA chairman. "Instead of working with industry leaders, the city moved forward with a policy that ignores economic realities and jeopardizes the jobs and businesses that keep this city's hospitality sector operating and supporting economic growth. Family-owned hotels now face choices—cutting staff, halting hiring, or raising rates—just as Los Angeles prepares to host millions of visitors for the World Cup and 2028 Olympics. You can't build a city by breaking the backs of the small businesses that make it run."
Laura Lee Blake, AAHOA president and CEO, said members are proud to create jobs in their communities, but the ordinance imposes costs that will affect the entire city.
“Even with a delayed rollout, the mandate represents a 70 percent wage increase above California's 2025 minimum wage,” she said. “This approach could remove more than $114 million each year from hotels, funds that could instead be invested in keeping workers employed and ensuring Los Angeles remains a competitive destination. The mandate increases the risk of closures, layoffs and a weaker Los Angeles."
A recent report from the American Hotel & Lodging Association found Los Angeles is still dealing with the effects of the pandemic and recent wildfires. International visitation remains below 2019 levels, more than in any other major U.S. city.
India-based TBO will acquire U.S. wholesaler Classic Vacations for up to $125 million.
The deal combines TBO’s distribution platform with Classic’s advisor network.
Classic will remain independent while integrating TBO’s global inventory and digital tools.
TRAVEL BOUTIQUE ONLINE, an Indian travel distribution platform, will acquire U.S. travel wholesaler Classic Vacations LLC from Phoenix-based The Najafi Cos., entering the North American market. The deal is valued at up to $125 million.
Gurugram-based TBO is led by co-founders and joint MDs Gaurav Bhatnagar and Ankush Nijhawan.
“We’re thrilled to bring Classic Vacations into the TBO family – the company’s longstanding delivery of services has earned the trust of more than 10,000 travel advisors in the U.S. and their end customers, making Classic Vacations a seamless fit for our vision in the travel and tourism industry,” said Bhatnagar. “Classic Vacations is led by a strong team and will continue as an independent brand while leveraging TBO’s technology and distribution capabilities to grow its business.”
Classic Vacations reported revenues of $111 million and an operating EBITDA of $11.2 million for the financial year ending Dec. 31, 2024, the companies said in a joint statement. The company has a network of more than 10,000 travel advisors and suppliers.
The acquisition combines TBO’s distribution platform with Classic’s advisor network to strengthen their position in the outbound market, the statement said. Classic will continue as an independent brand while integrating TBO’s global inventory and digital tools.
Nijhawan said the acquisition furthers TBO’s investment in organic and inorganic growth.
“As we begin integrating Classic Vacations with TBO, we will remain open to similar strategic alliances going forward,” he said.
Classic Vacations was acquired from Expedia Group by The Najafi Cos. in 2021.
“This acquisition and partnership are a natural next step for our portfolio company Classic Vacations, and we’re happy to have worked successfully with them for the last four years, maximising the company’s strengths and expertise in luxury travel,” said Jahm Najafi, founder and CEO, The Najafi Companies.
Moelis & Co. LLC was the financial adviser and Ballard Spahr LLP the legal adviser to Classic Vacations. Cooley LLP served as legal adviser and PwC as financial and tax adviser to TBO.