PORTSMOUTH, N.H. — According to the recent U.S. Construction Pipeline Trend Report released by Lodging Econometrics (LE), Dallas had more hotel projects in its pipeline than any other U.S. market at the close of the fourth quarter of 2021—152 projects totaling 18,180 rooms. Following Dallas, the U.S. markets with the largest total hotel construction pipelines by project count were Atlanta, at a cyclical high of 133 projects/17,593 rooms; New York City with 121 projects/19,303 rooms; Los Angeles with 120 projects/19,815 rooms; and Houston with 91 projects/9,912 rooms.
Despite the impact COVID-19 has had on hotel development, three markets in the U.S. announced more than 10 new construction projects in Q4 2021. Miami had the highest number of new projects announced into the pipeline with 17 projects totaling 2,797 rooms. Dallas followed with 13 projects/1,308 rooms, and then Orlando with 11 projects/1,791 rooms.
New York had the greatest number of projects already in the ground at the end of the fourth quarter—90 projects totaling 14,513 rooms. Dallas followed distantly with 28 projects/3,945 rooms, then Austin with 28 projects/3,706 rooms, Atlanta with 26 projects/4,120 rooms, and Detroit with 23 projects/2,432 rooms. These five markets collectively accounted for 20 percent of the total number of projects under construction in the United States at the end of the year.
Dallas had the highest number of projects scheduled to start construction in the next 12 months—51 projects/5,989 rooms. Atlanta followed with 51 projects/5,989 rooms, then Houston with 42 projects/4,107 rooms, Los Angeles with 41 projects/6,278 rooms, and Phoenix with 38 projects/4,401 rooms. Dallas also has the highest number of projects in the early planning stage at the end of Q4 2021—73 projects/8,246 rooms. Los Angeles followed with 57 projects/9,907 rooms, then Atlanta with 56 projects/6,561 rooms, Orlando with 45 projects/7,896 rooms, and Nashville with 38 projects/4,680 rooms.
The top 50 markets saw 449 hotels/63,742 rooms open in 2021. LE is forecasting these same 50 markets will open another 446 projects/57,837 rooms in 2022 for a 2.2 percent growth rate, and 421 projects/52,460 rooms in 2023 for a growth rate of 1.9 percent.
Moving into the New Year, an important metric to monitor will be markets with large construction pipelines as compared to their existing census of open and operating hotels. These markets are likely to see the fastest supply growth and largest supply-demand variances over the next few years. At the end of 2021, 17 markets had total pipelines in excess of 15 percent of their current census. Raleigh-Durham tops this list at 24.1 percent, followed by Miami, Fort Worth-Arlington, Austin, and Memphis at 22.1 percent.
The markets topping the forecast for new hotel openings in 2022 are New York City with 48 new hotels/6,656 rooms for a 5.4 percent growth rate; Atlanta with 22 projects/2,398 rooms for a 2.1 percent growth rate; Dallas with 21 projects/2,522 rooms for a 2.4 percent growth rate; and Austin with 20 projects/2,722 rooms for a 5.9 percent growth rate. LE expects a 2.1 percent average growth rate for the top 25 markets in 2022 and, come 2023, these top 25 markets are expected to experience an average growth rate of 1.9 percent.
New York will again top the charts in 2023 for new hotel openings. LE anticipates New York will open 42 new hotels totaling 7,058 rooms—a 5.4 percent growth rate—followed by Atlanta opening 21 hotels/3,664 rooms for a 3.2 percent growth rate, and Dallas opening 21 hotels/2,318 rooms for a growth rate of 2.2 percent.