Diving certificate:
- The global hotel construction pipeline reached record highs in the second quarter of 2024, with the United States leading all other countries in the number of projects, according to Lodging Econometrics’ Global Construction Pipeline Trend Report for the second quarter of 2024.
- The total global pipeline increased 6% year-over-year to a record 15,453 projects, or nearly 2.4 million rooms, the report detailed. The U.S. surpassed China in the number of projects in the pipeline, with a record 6,095 projects.
- Globally, upper mid-range, upscale and mid-range chains dominated the overall pipeline in the second quarter, accounting for 65% of projects. Hotel industry leaders recently forecast that upper-range chains will benefit from changing travel patterns for the rest of the year and beyond.
Diving insight:
In the second quarter of this year, there were 6,265 hotel projects, or 1.2 million rooms, under construction worldwide, according to the report. During the quarter, 3,972 projects were scheduled to begin construction in the next 12 months and 5,216 projects were in the early planning stages.
The U.S. led all other countries, accounting for 39% of projects in the global pipeline in the second quarter, Lodging Econometrics reported. And Dallas and Atlanta topped the largest hotel construction pipelines globally during the quarter.
China followed the US, accounting for 25% of projects in the global pipeline. Together, the two countries accounted for 64% of hotel projects in the overall pipeline. India, Canada and Saudi Arabia followed the US and China “by a wide margin,” according to Lodging Econometrics.
Across the market spectrum, the upper-middle, upper-luxury and mid-range segments “dominated” the second quarter, the report shows.
Upper-mid-range hotel projects accounted for 29% of the total global pipeline for the quarter (4,540). The upscale segment, meanwhile, reached a record number of 3,688 projects or 634,050 rooms. And the number of mid-range hotel projects increased by 5% year-on-year in the second quarter, reaching 1,868 projects.
RevPAR will grow faster in the upper segments than in other chain sizes through 2025, STR and Tourism Economics predicted earlier this month. And that growth could potentially boost construction activity in those segments.
Performance growth in the upper chain segments will be driven by “high-income households continuing to travel,” STR President Amanda Hite noted in her outlook. At the same time, low- and middle-income households are expected to spend less on travel, and mid-range and economy hotels will “feel the impact of the reduced number of lower-income travelers,” according to Hite.
