U.S. hotel construction declined for third consecutive month

WASHINGTON – The volume of U.S. hotel rooms under construction decreased year over year for a third consecutive month, according to CoStar‘s March 2025 pipeline data. CoStar is a leading provider of online real estate marketplaces, information and analytics in the property markets.

U.S. Hotel Pipeline

March 2025 (percentage change from March 2024)

• In construction: 144,760 rooms (-7.5%)
• Final Planning: 273,068 rooms (+3.7%)
• Planning: 359,878 rooms (+10.9%)

“With increased uncertainty and the potential for rising construction costs, it is not surprising that fewer projects have broken ground,” said Isaac Collazo, senior director of analytics at STR. “The number of hotels under construction is down 103 versus a year ago, meaning most markets are seeing one less hotel in the final phase of the pipeline. The overaall pipeline remains robust, however, with 6,500 hotels and 777,000 rooms when you add in the planning phases. We’ll be watching those planning phases closely because those are where economic uncertainty is most likely to be impactful. Projects already in construction are going to be completed regardless.”

Chain Scale Segments (% of existing supply, in-construction room count)

1.    Luxury (4.1%, 6,421 rooms)
2.    Upper Upscale (2.6%, 18,813 rooms)
3.    Upscale (3.8%, 35,082 rooms)
4.    Upper Midscale (3.2%, 38,217 rooms)
5.    Midscale (2.7%, 13,883 rooms)
6.    Economy (0.9%, 5,933 rooms)

“The construction decline was concentrated in Upper Midscale, which accounted for more than a third of the difference in room count and slightly more in the number of hotels versus a year ago,” said Collazo. “Even with the decrease, Upper Midscale makes up the largest number of hotels and rooms under construction.”

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