Offering clients the level of certainty they need to make critical, real-time decisions to ensure the commercial success of their hotel and leisure projects.
Our hospitality market insights document lets industry leaders and clients know what the latest trends are in the sector, including hospitality pipeline, strategic advice for future construction booms, insights on short-term growth and flexibility.
Record Pipeline Signals Strong Industry Confidence
At the end of Q2, the pipeline for new hotel construction projects reached a historic high with 6,095 projects and 713,151 rooms, reflecting a 9% year-over-year rate of growth. Despite near-term economic headwinds, the investment in the future supply of guestrooms highlights owner optimism about long-term opportunities, positioning the industry for substantial growth once market conditions stabilize.
Strategic Patience Paves Way for Future Construction Boom
Lodging construction spending in the U.S. has not recovered to 2019 levels, signaling that hoteliers and developers are strategically holding off on major builds due to high interest rates that pose financing hurdles. This cautious approach sets the stage for a construction surge as analysts project that lower interest rates may soon unlock a wave of projects transitioning from planning to active construction.
Conversions Fuel Short-Term Growth and Flexibility
While new construction projects remain in the planning and design phases, a 4% year-over-year increase in hotel conversions and renovations are contributing to the current activity surge. This trend demonstrates how owners are capitalizing on opportunities in the current market, ensuring steady progress in the sector while awaiting more favorable conditions to start new builds.
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