Three Chain Scales Hit Record-High Project Counts in the Global Hotel Construction Pipeline at Q2

In the Q2 ‘23 Global Construction Pipeline Trend Report from Lodging Econometrics (LE), analysts state that the total global construction pipeline stands at 14,572 projects/2,310,238, up 3% year-over-year (YOY) by projects and 1% YOY by rooms.

Worldwide, at the close of the second quarter, there are 6,154 projects/1,108,498 rooms under construction, 3,679 projects/506,760 rooms scheduled to start within the next 12 months, and 4,739 projects/694,980 rooms in the early planning stage.

Luxury, upper upscale, and the upper midscale chains dominate the pipeline at Q2, reaching record project counts at Q2 and accounting for 47% of the projects in the total pipeline. Of that 47%, upper midscale hotel projects comprise 29% of the projects in the total global pipeline with a record 4,236 projects and 558,159 rooms. Upper upscale projects stand at 1,653 projects/374,407 rooms at Q2, while luxury hotel projects increased 10% YOY to close the quarter at 909 projects/180,538 rooms.

Across the globe, the top countries by project count are the United States, with 5,572 projects/660,061 rooms, and China with 3,666 projects/678,965 rooms. The U.S. accounts for 38% of the projects in the global pipeline while China accounts for 25%, resulting in 63% of the global pipeline being concentrated within these two countries. Following distantly is India with 480 projects/57,161 rooms, the United Kingdom with 322 projects/45,181 rooms, and Saudi Arabia with 276 projects/72,144 rooms.

The markets with the largest pipeline counts worldwide at Q2 are Dallas with 184 projects/21,501 rooms, Atlanta with 141 projects/17,993 rooms, and Chengdu with 140 projects/27,890 rooms; followed by Phoenix with 119 projects/16,107 rooms and Shanghai with 117 projects/22,887 rooms. Of the 11 markets having over 100 projects in their total pipelines, seven are located in the U.S., three are in China, and one is in Saudi Arabia.

Three franchise companies top the global construction pipeline by project-count at Q2, accounting for 50% of the projects in the total global pipeline. These companies are Hilton Worldwide with 2,808 projects/398,742 rooms, Marriott International with 2,679 projects/429,925 rooms, and IHG Hotels & Resorts with 1,764 projects/259,668 rooms. Accor follows with 930 projects/160,951 rooms and then Hyatt Hotels & Resorts with 417 projects/77,238 rooms.

Upper midscale brands for the top three companies lead the total global pipeline in project counts with Hilton’s Hampton Inn brand standing at 790 projects/102,607 rooms, IHG’s Holiday Inn Express has 599 projects/74,036 rooms, Marriott’s TownePlace Suites closed the quarter with 364 projects/34,125 rooms. Accor’s top brand at Q2 is its upscale Novotel brand with 137 projects/26,474 rooms and Hyatt’s upscale Hyatt Place brand with 105 projects/16,408 rooms at the close of the quarter.

Throughout the first half of 2023, 868 new hotels accounting for 129,047 rooms opened worldwide, with an additional 1,663 hotels/251,468 rooms scheduled to open by year-end. LE analysts forecast a total of 2,531 new hotels with 380,515 rooms to open in 2023. In 2024, new openings are forecast to reach 2,674 hotels, accounting for 415,699 rooms. For 2025, LE analysts forecast 2,701 new hotels/429,006 rooms to open around the world.