- Hyatt expands select-service, extended-stay properties.
- HVS: Select-service hotels cost less to develop.
- LE cuts its 2026 openings forecast 20 percent.
HYATT HOTELS CORP. is adding select-service and extended-stay hotels across U.S. regional markets as hotel supply grows below its pre-2020 pace. Lower development costs support these formats as higher costs slow other projects, but local competition will determine their performance.
Hyatt's Sept. 30 release listed 15 U.S. hotels in 10 states. At least seven offer kitchens or kitchenettes or are extended stay. However, the company did not disclose owners, room counts or conversion details. Five states—Florida, Texas, New York, North Carolina and California—also led HVS' 2026 U.S. Hotel Development Cost Survey.
“Travel does not always happen on our terms,” said Jason Ballard, Hyatt’s senior vice president and global brand leader for Essentials. “Plans change, schedules move, trips get extended. Our job is to make the stay feel easy, useful and distinctly Hyatt wherever your journey takes you.”
Hyatt House Chicago/West Loop-Fulton Market in ChicagoPhoto credit: Hyatt Hotels Corp.
HVS said Hyatt Studios and Hyatt House accounted for a meaningful share of new projects in its 2025 budgets, while Marriott and Hilton remained the most represented brands. In March, Hyatt said its Southeast pipeline had more than 30 Essentials hotels totaling about 4,000 rooms, with a smaller Hyatt Place prototype and Hyatt Select aimed at lowering costs and supporting conversions.
3H Group CEO Hiren Desai said its two Alabama Hyatt Studios were gaining extended-stay and corporate demand.
Why supply is growing slowly
Pace of U.S. hotel supply growth expected to increase through 2029Photo credit: STR/CoStar (Historical), HVS (Forecast)
HVS reported that U.S. hotel supply grew 0.2 percent in 2023, 0.6 percent in 2024 and 0.7 percent in 2025, versus a 1.4 percent pre-2020 average. It forecasts growth of 0.8 percent in 2026 and 1.1 percent in 2027, citing higher construction and financing costs and selective lending that often requires more equity.
The survey also found renewed cost pressure, with the Turner Building Cost Index up 4.8 percent over the trailing 12 months, partly because of tariffs on imported metals.
Lodging Econometrics' forecasts show the same trend. Its 2026 forecast fell to 661 openings and 74,820 rooms from 823 openings and 89,073 rooms a year earlier, while its 2027 forecast fell from 902 hotels to 738.
The pipeline remains large, with LE counting 5,975 projects and 703,001 rooms in the second quarter, down nearly 5 percent from a year earlier. Construction starts rose 14 percent and new project announcements 18 percent, despite lower completion forecasts.
Cost helps determine which hotel formats get built. HVS found median development costs of $170,000 to $197,000 per room for limited-service and midscale extended-stay hotels, $200,000 for select-service, $265,000 for upscale extended-stay and $467,000 for full-service hotels; limited-service and extended-stay projects made up more than half of its sample.
For Hyatt, that creates room to expand beyond major metropolitan markets. Its latest U.S. examples include Hyatt Select Williamsburg, Hyatt Studios Chesapeake, Hyatt House Schenectady/Mohawk Harbor, Hyatt House Destin, Hyatt Studios Kalispell and The 233 Suites in Mesa.
What it means for the next wave of projects
Photo credit: Hyatt Hotels Corp.
Hyatt’s portfolio now has more than 700 hotels across seven brands worldwide. In the U.S., the company is adding Hyatt Place, Hyatt House, Hyatt Studios, Hyatt Select, Caption by Hyatt and Unscripted by Hyatt properties in markets ranging from coastal destinations to business hubs and smaller communities.
Demand is giving developers another reason to consider these formats. HVS said operating fundamentals increasingly support new supply, although development remains constrained. CoStar and Tourism Economics forecast 4.4 percent U.S. RevPAR growth for 2026, including about 3.6 percent for select-service hotels, but expect growth to slow to 2.1 percent in 2027.
The 2026 outlook may not reflect conditions when projects open. CoStar and Tourism Economics said the year benefits from the FIFA World Cup and America’s 250th anniversary celebrations, while projects entering development now could open after those demand drivers pass.
Supply growth is expected to rise later in the decade, with HVS forecasting an increase through 2029 and noting that hotels typically take three to five years to develop; 2026 forecasts range from 1.3 percent from LE to 0.8 percent from HVS and 0.4 percent from CoStar and Tourism Economics, which use different supply measures. Risk remains local, with LE expecting Phoenix to lead U.S. openings in 2026 and Dallas in 2027, while a record 1,567 conversions could add competing rooms without the cost and timeline of ground-up development.
For existing owners, slower supply growth can support occupancy and pricing where local competition is limited, while investors should not extend 2026 RevPAR growth into later years. HVS said higher costs may give well-capitalized developers time to begin feasibility, entitlements and design while development remains constrained.
The test is local. Developers need to map competing projects, compare new-build costs with conversions and test performance against slower demand growth, because the market around each project may matter more than the brand.
LE’s opening figures are forecasts that are revised during the year. Hyatt's release did not disclose ownership, room counts or financial terms for the properties.
Separately, Hyatt recently appointed Amar Lalvani chief creative officer, effective immediately.
