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Global Hotel Construction Pipeline Slows Down

Hotel Construction

Lodging Econometrics (LE) has released its Global Hotel Construction Pipeline Trend Report, which compiles the hotel construction pipeline counts for every country and market around the world.

The report for Q2 2021 states that the total global hotel construction pipeline stands at 13,420 projects/2,253,499 rooms. Year-over-year (YOY) the pipeline decreased 9% by projects and 7% by rooms. However, the construction pipeline is up a noteworthy 94% by projects over the cyclical low established in 2011 when global counts were at 6,907 projects/1,257,296 rooms.

There are 6,197 projects/1,142,207 rooms currently under construction worldwide, dropping 10% by projects and 7% by rooms YOY. Projects scheduled to start construction in the next 12 months are down 21% by projects and 19% by rooms to end the second quarter with 3,623 projects/527,392 rooms. Projects in the early planning stage stand at 3,600, just eight projects short of the record high established in the fourth quarter of 2019, while rooms hit an all-time high count of 583,900 this quarter.

The top countries by project count are the United States (U.S.) with 4,787 projects/598,111 rooms and China with 3,454 projects and a record high of 661,043 rooms. The U.S. accounts for 36% of projects in the total global hotel construction pipeline while China accounts for 26%, resulting in 61% of all global pipeline projects being concentrated in these two countries. Distantly following are the United Kingdom with 345 projects/52,925 rooms, Indonesia with 318 projects/51,197 rooms, and India with 282 projects/ 37,617 rooms.

Around the world, the markets with the largest pipeline counts are New York, NY with 146 projects/25,232 rooms; Chengdu, China with 138 projects/28,009 rooms, and Los Angeles, CA with 135 projects/22,586 rooms. Dallas, TX follows with 132 projects/16,183 rooms, then Atlanta, GA with 129 projects/71,845 rooms. Of the top 10 markets having over 100 projects in the pipeline, five are in the U.S., four are located in China, and one is in the Middle East region.

The top five franchise companies leading the global construction pipeline by project count are Marriott International with 2,471 projects/425,351 rooms, Hilton Worldwide with 2,450 projects/370,619 rooms, InterContinental Hotels Group (IHG) with 1,669 projects/246,575 rooms, Accor with 913 projects/ 168,562 rooms, and Hyatt, with 371 rooms/73,767 projects. These five companies account for 59% of all projects in the global pipeline.

Throughout the first half of 2021, 1,100 hotels opened worldwide, accounting for 161,734 rooms. LE research analysts forecast a total of 2,802 new hotels/414,696 rooms to open by year-end. In 2022, 3,122 new hotel openings/476,185 rooms are expected to open, with 1,008 of these openings located in the U.S. For 2023, we are forecasting 2,890 new hotels, accounting for 468,645 rooms, opening around the world.

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