In the recent U.S. Construction Pipeline Trend Report released by Lodging Econometrics (LE), at the close of the fourth quarter of 2021, Dallas leads the U.S. markets in the number of pipeline projects with 152 projects/18,180 rooms. Following Dallas, the U.S. markets with the largest total hotel construction pipelines by project count are Atlanta, at a cyclical high, with 133 projects/17,593 rooms; New York City with 121 projects/19,303 rooms; Los Angeles with 120 projects/19,815 rooms; and Houston, with 91 projects/9,912 rooms.
Despite the impact COVID-19 has had on hotel development, three markets in the U.S. announced more than 10 new construction projects in Q4‘21. Miami had the highest number of new projects announced into the pipeline with 17 projects/2,797 rooms. Following Miami is Dallas with 13 projects/1,308 rooms, and then Orlando with 11 projects/1,791 rooms.
The market with the greatest number of projects already in the ground, at the end of the fourth quarter, is New York with 90 projects/14,513 rooms. Following distantly are Dallas with 28 projects/3,945 rooms, Austin with 28 projects/3,706 rooms, Atlanta with 26 projects/4,120 rooms, and Detroit with 23 projects under construction, accounting for 2,432 rooms. These five markets collectively account for 20% of the total number of projects currently under construction in the U.S.
Dallas has the most projects scheduled to start in the next 12 months, with 51 projects/5,989 rooms. Behind Dallas are Atlanta with 51 projects/5,989 rooms; Houston, with 42 projects/4,107 rooms; Los Angeles with 41 projects/6,278 rooms; and Phoenix with 38 projects/4,401 rooms. Dallas also has the largest number of projects in early planning, at the end of Q4’21, with 73 projects/8,246 rooms. Los Angeles follows with 57 projects/9,907 rooms; Atlanta 56 projects/6,561 rooms; Orlando 45 projects/7,896 rooms; and Nashville 38 projects/4,680 rooms.
The top 50 markets saw 449 hotels/63,742 rooms open in 2021. LE is forecasting these same 50 markets to open another 446 projects/57,837 rooms in 2022 for a 2.2% growth rate, and 421 projects/52,460 rooms in 2023 for a growth rate of 1.9%.
Moving into the New Year, an important metric to monitor will be markets with large construction pipelines as compared to their existing census of open & operating hotels. These markets are likely to see the fastest supply growth and largest supply-demand variances over the next few years. At the end of 2021, there were 17 markets with total pipelines in excess of 15% of their current census. Raleigh-Durham tops this list at 24.1%, followed by Miami, Fort Worth-Arlington, Austin, and then Memphis at 22.1%.
The markets topping the forecast for new hotel openings in 2022 will be New York City with 48 new hotels/6,656 rooms for a 5.4% growth rate, Atlanta with 22 projects/2,398 rooms for a 2.1% growth rate, Dallas with 21 projects/2,522 rooms for a 2.4% growth rate, and Austin with 20 projects/2,722 rooms for a 5.9% growth rate. LE expects a 2.1% average growth rate for the top 25 markets in 2022 and, come 2023, these top 25 markets will experience an average growth rate of 1.9%. New York will again top the charts in 2023 for new hotel openings. LE anticipates New York will open 42 new hotels, accounting for 7,058 rooms, again for a 5.4% growth rate, followed by Atlanta 21 projects/3,664 rooms for a 3.2% growth rate, and Dallas with 21 new opens/2,318 rooms for a growth rate of 2.2%.
Related Stories
Market Data | Aug 17, 2021
Demand for design activity continues to expand
The ABI score for July was 54.6.
Market Data | Aug 12, 2021
Steep rise in producer prices for construction materials and services continues in July.
The producer price index for new nonresidential construction rose 4.4% over the past 12 months.
Market Data | Aug 6, 2021
Construction industry adds 11,000 jobs in July
Nonresidential sector trails overall recovery.
Market Data | Aug 2, 2021
Nonresidential construction spending falls again in June
The fall was driven by a big drop in funding for highway and street construction and other public work.
Market Data | Jul 29, 2021
Outlook for construction spending improves with the upturn in the economy
The strongest design sector performers for the remainder of this year are expected to be health care facilities.
Market Data | Jul 29, 2021
Construction employment lags or matches pre-pandemic level in 101 metro areas despite housing boom
Eighty metro areas had lower construction employment in June 2021 than February 2020.
Market Data | Jul 28, 2021
Marriott has the largest construction pipeline of U.S. franchise companies in Q2‘21
472 new hotels with 59,034 rooms opened across the United States during the first half of 2021.
Market Data | Jul 27, 2021
New York leads the U.S. hotel construction pipeline at the close of Q2‘21
Many hotel owners, developers, and management groups have used the operational downtime, caused by COVID-19’s impact on operating performance, as an opportunity to upgrade and renovate their hotels and/or redefine their hotels with a brand conversion.
Market Data | Jul 26, 2021
U.S. construction pipeline continues along the road to recovery
During the first and second quarters of 2021, the U.S. opened 472 new hotels with 59,034 rooms.
Market Data | Jul 21, 2021
Architecture Billings Index robust growth continues
AIA’s Architecture Billings Index (ABI) score for June remained at an elevated level of 57.1.
