Dive Brief:
- The global hotel construction pipeline reached record highs in the second quarter of 2024, with the U.S. leading all other countries by project count, according to Lodging Econometrics’ Q2 2024 Global Construction Pipeline Trend Report.
- The total global pipeline climbed 6% year over year to a record 15,453 projects, or nearly 2.4 million rooms, the report detailed. The U.S. beat China for the most projects in the pipeline, with a record 6,095 projects.
- Globally, the upper midscale, upscale and midscale chain scales dominated the total pipeline in Q2, accounting for 65% of projects. Hotel industry leaders have recently forecasted that upper-tier chains will benefit from changing traveler behavior in the remainder of this year and beyond.
Dive Insight:
In the second quarter this year, there were 6,265 hotel projects, or 1.2 million rooms, under construction globally, according to the report. In the quarter, there were 3,972 projects scheduled to start construction in the next 12 months as well as 5,216 projects in the early planning stage.
The U.S. led all other countries, accounting for 39% of the projects in the global pipeline in Q2, Lodging Econometrics reported. And Dallas and Atlanta led all other cities worldwide for the largest hotel construction pipelines in the quarter.
China followed the U.S., accounting for 25% of projects in the global pipeline. Together, the two countries made up 64% of hotel projects in the total pipeline. India, Canada and Saudi Arabia “distantly followed” the U.S. and China, according to Lodging Econometrics.
Across the total pipeline, the upper midscale, upscale and the midscale segments “dominated” Q2, the report detailed.
Upper midscale hotel projects (4,540) comprised 29% of those in the total global pipeline in the quarter. The upscale segment, meanwhile, reached record pipeline project counts of 3,688 projects, or 634,050 rooms. And the number of midscale hotel projects increased 5% year over year in Q2, reaching 1,868 projects.
Upper-tier segments will see higher RevPAR growth than other chain scales through 2025, STR and Tourism Economics forecasted earlier this month. And that growth could potentially bolster construction in those segments.
Performance growth in the upper-tier chain scales will be a result of “high-income households continuing to travel,” STR President Amanda Hite noted in the outlook. Meanwhile, low-income and middle-income households are expected to weaken travel spending, and midscale and economy hotels will “feel the effect of fewer lower-income travelers,” according to Hite.
