Portsmouth, N.H. — According to the Q3 2019 construction pipeline trend report published by Lodging Econometrics (LE), the total pipelines for the top 25 markets account for 39.7 percent of all pipeline rooms. When built out, they represent a potential growth rate of 15.9 percent over all existing open and operating rooms. While overall supply growth has risen to 2 percent year-to-date in 2019, it’s up 2.5 percent in the top 25 markets and 1.7 percent in the other markets nationwide.
In the first three quarters of 2019, the United States opened 704 new hotels with 81,111 rooms. Following New York, Dallas, and Houston, Boston and Nashville had the most hotel openings, with 16 hotels/2,435 rooms and 15 hotels/1,965 rooms, respectively. These five markets alone account for 15 percent of all new hotels that opened in the United States through the end of the third quarter.
Dallas, New York, and Houston opened the most hotels in the past three years, followed by Nashville and Atlanta, which opened 62 and 58 hotels, respectively. All but Nashville show supply growth in excess of demand growth year-to-date in 2019.
In the next three years, the markets with the most hotel supply expected to open are New York with 123 hotels, Dallas with 107 hotels, Houston with 87 hotels, Atlanta with 72 hotels, and Nashville with 67 hotels.
Q3 2019: Largest Hotel Construction Pipelines
In Q3 2019, Los Angeles had 161 projects/26,670 rooms in its hotel construction pipeline. The city is expected to open 24 new hotels totaling 3,370 rooms in 2020—the third-highest number of new openings predicted for next year. In 2021, Los Angeles is expected to come in third for most hotel openings, with 27 new hotels totaling 3,868 rooms.
New York had 155 projects totaling 26,605 rooms in its pipeline in Q3 2019. While it had the second-largest pipeline in the third quarter, New York City had the highest number of new hotel openings in the first three quarters of 2019, with 28 new hotels totaling 4,513 rooms. New York opened 90 hotels in the last three years—second only to Dallas. New York City is the market forecast to open the greatest number of new hotels in 2020, with 61 new hotels totaling 8,283 rooms.
In Q3 2019, Dallas had 160 projects/20,020 rooms in its pipeline. Dallas had the second-highest number of hotel openings so far this year—26 hotels/3,073 rooms. For the last three years, Dallas opened the most hotels—92 total. In 2020, Dallas is forecast to have the second-highest number of openings, with 35 new hotels/3,852 rooms. In 2021, Dallas leads the forecast for new hotel openings with 43 hotels/5,283 rooms.
Houston had 138 hotel projects/14,130 rooms in its pipeline in the third quarter of 2019. The city had the third-highest number of new hotel openings so far in 2019, with 18 hotels totaling 2,285 rooms. Houston opened 76 hotels in the last three years. LE forecasts that Houston will have the second-highest number of new hotel openings in 2021, with 39 new hotels totaling 3,725 rooms.
Atlanta rounded out the top five markets in Q3 2019 with 137 projects/18,396 rooms.