As of the close of the second quarter, the total global pipeline stands at a record-breaking 15,453 projects, accounting for 2,395,726 rooms. This marks a 6% year-over-year (YOY) increase in projects and a 4% rise in the number of rooms, indicating a strong momentum in the hospitality sector.
Global Construction Pipeline Overview
The report highlights that the hotel construction pipeline is in various stages of development, with a significant number of projects already underway. There are 6,265 projects comprising 1,115,989 rooms currently under construction worldwide, reflecting a 2% YOY increase in projects and a 1% rise in rooms. This steady growth is a positive sign of the industry’s resilience and the sustained demand for new hotel developments.
In addition to the projects under construction, the pipeline includes a substantial number of projects scheduled to start construction in the next 12 months. These projects have seen an 8% YOY growth, closing the quarter with 3,972 projects and 545,764 rooms. Furthermore, projects in the early planning stages continue to expand, with a 10% YOY increase in projects and a 6% increase in rooms. As of Q2 2024, there are 5,216 projects in early planning, accounting for 733,973 rooms.
Chain Scale Distribution
The report reveals that the global pipeline is dominated by upper midscale, upscale, and midscale chain scales, which collectively represent 65% of the total projects. Upper midscale hotels lead the pack, with 4,540 projects and 585,688 rooms, accounting for 29% of the total global pipeline. Upscale hotel projects also reached record highs, with 3,688 projects and 634,050 rooms. Midscale hotels have shown a 5% YOY increase, closing the quarter with 1,868 projects and 186,592 rooms.
Luxury hotel projects and rooms have also seen significant growth, achieving record highs in Q2 2024. The report indicates a 13% YOY increase in luxury projects and a 14% rise in rooms, with a total of 1,066 projects and 214,270 rooms in the pipeline. This upward trend in luxury accommodations reflects the ongoing demand for high-end travel experiences worldwide.
Regional Leaders: The U.S. and China
The United States and China continue to be the driving forces behind the global hotel construction boom, together accounting for 64% of the total projects in the pipeline. The U.S. leads with 6,095 projects and 713,151 rooms, representing 39% of the global pipeline. China follows closely with 3,815 projects and 699,786 rooms, accounting for 25% of the worldwide total.
This dominance by the U.S. and China underscores the significant investments being made in these two countries, driven by robust domestic travel markets and continued economic growth. The concentration of projects in these regions also highlights the strategic importance of these markets for global hotel brands looking to expand their footprint.
Other Key Markets
While the U.S. and China are the primary drivers of global hotel construction, other countries are also experiencing notable growth. India, for instance, has reached a record-high of 610 projects with 75,280 rooms in the pipeline. This reflects India’s growing appeal as a travel destination and the increasing demand for hospitality infrastructure to support its expanding tourism industry.
Canada and Saudi Arabia are also making significant strides in hotel development. Canada closed the quarter with record highs of 322 projects and 40,297 rooms, while Saudi Arabia saw record highs with 320 projects and 79,756 rooms. The growth in these markets is indicative of their rising prominence in the global tourism landscape.
Leading Cities in Hotel Development
On the city level, Dallas, Texas, tops the list with the largest hotel construction pipeline, boasting 189 projects and a record-high 22,392 rooms. Atlanta, Georgia, follows with a record 159 projects and 18,522 rooms. Chengdu, China, is another major player, with 147 projects and 26,951 rooms in the pipeline. Shanghai, China, is close behind with 126 projects and 24,340 rooms, while California’s Inland Empire has set a new record with 124 projects and 12,569 rooms.
These cities are emerging as key hubs for hotel development, driven by a combination of strong economic performance, tourism growth, and strategic location. The concentration of projects in these areas reflects the increasing urbanization and the demand for new accommodation options in both established and emerging markets.
Forecast for New Hotel Openings
The first half of 2024 has already seen 948 new hotels with 135,579 rooms open globally. The pace of new openings is expected to accelerate, with an additional 1,586 hotels and 237,107 rooms scheduled to open by the end of the year. LE analysts forecast a total of 2,534 new hotels with 372,686 rooms to open in 2024.
Looking ahead, the momentum is expected to continue into 2025 and 2026. LE forecasts that 2,756 new hotels with 429,120 rooms will open in 2025, followed by 2,812 hotels with 430,355 rooms in 2026. This sustained growth highlights the ongoing confidence in the global hospitality industry and the strong demand for new hotel developments.
The Q2 2024 Global Construction Pipeline Trend Report from Lodging Econometrics paints a picture of a thriving global hotel industry, with the United States and China leading the charge. As the industry continues to recover and expand, the record-high pipeline numbers indicate a bright future for the hospitality sector. With new projects and rooms being added at a rapid pace, the global hotel market is poised for continued growth and innovation in the coming years.
