CoStar: U.S. hotel construction declined for third consecutive month

The volume of U.S. hotel rooms under construction decreased year over year for a third consecutive month, according to CoStar’s March 2025 data.

U.S. Hotel Pipeline

March 2025 (percentage change from March 2024)

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

“With increased uncertainty and the potential for rising construction costs, it is not surprising that fewer projects have broken ground,” Isaac Collazo, senior director of analytics at STR, said in a statement. “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 overall 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 

(Percentage of existing supply, in-construction room count)

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

Hotel Pipeline Globally

Europe is the only world region that showed a year-over-year decrease in overall pipeline activity at the end of the first quarter, according to CoStar’s March 2025 pipeline data.

Americas

• In construction: 194,823 rooms (-5.4 percent)
• Final planning: 306,396 rooms (+3.4 percent)
• Planning: 423,746 rooms (+11.9 percent)
• Total under contract: 924,965 (+5.0% percent)

The U.S. (144,760) holds the majority of rooms in construction in the region. After the U.S., Mexico (13,891), Canada (10,374) and Brazil (5,407) show the highest number of rooms in construction.

Europe

• In construction: 173,961 rooms (+0.9 percent)
• Final planning: 77,252 rooms (-22.6 percent)
• Planning: 176,295 rooms (+9.9 percent)
• Total under contract: 427,508 (-1.2 percent)

Germany leads Europe in total rooms in construction (26,117), closely followed by the United Kingdom (24,115).

Asia Pacific

• In construction: 533,937 rooms (+6.2 percent)
• Final planning: 43,763 rooms (-60.2 percent)
• Planning: 389,767 rooms (+34.9 percent)
• Total under contract: 967,467 (+7.3 percent)

Among countries in the region, China (332,325) led in construction activity, followed by Vietnam (38,783) and India (38,228).

Middle East & Africa

• In construction: 103,038 rooms (-7.0 percent)
• Final planning: 28,215 rooms (-22.0 percent)
• Planning: 97,813 rooms (+20.3 percent)
• Total under contract: 229,066 (+0.4 percent)

Most of the region’s pipeline activity is focused in the Middle East. Saudi Arabia (42,800) and the United Arab Emirates (16,019) have the most rooms in construction.