As of April 1, there were a whopping 703,000 guest rooms in the nation’s hotel pipeline—either under construction or in the planning stage—which represents an all-time high. In 2024, more than 75,000 guest rooms are expected to open nationwide, while in 2025, about 85,000 guest rooms are expected to open.

However, a closer look at which hotels are adding the most rooms shows that the growth isn’t going to help business-event planners much.

According to the Q1 2024 U.S. Hotel Construction Pipeline Trend Report from Lodging Econometrics, 67 percent of the guest rooms in the pipeline are for the midscale, upper midscale, and upscale segments—properties with minimal meeting space and which planners of citywide conventions and exhibitions might use only as overflow for their room blocks.

On the other hand, just nine percent of the rooms in the pipeline are for the upper-upscale segment, which comprises most meetings-focused brands from Hilton, Hyatt, IHG, Marriott, Radisson, and Wyndham. And in the luxury segment that many incentive-travel programs use, new rooms in the pipeline are just three percent of the total—but that segment is growing at the highest rate versus its total number of existing rooms: 4.3 percent.

The upper-upscale numbers are more discouraging when planners consider the significant year-over-year increase in room demand and room rates at meetings-focused properties. According to hospitality-research firm CoStar, among hotels in the upper-upscale and luxury segments classes, “improving group demand has been a major story, with YoY increases of 8.7 percent in January and 6.7 percent in February. Further, every week in January showed an improvement over the same week a year earlier.” In contrast, “transient [business] demand has shown minimal increases since the start of 2024.”

Further, average daily rate for group business “saw a 4.5 percent YoY increase in January and an impressive 7.5 percent gain in February. In comparison, transient daily rate stayed well below inflation, 1.3 percent YoY for January and 1.6 percent in February."

Rob Carey