U.S. hotel construction falls for 6th consecutive month

The number of rooms currently under construction is down by almost 12 per cent, which is starkly different from the same numbers CoStar released in June 2024—when U.S. hotel construction activity was the highest it had been since February 2023.

Isaac Collazo, senior director of analytics, STR, said the number of rooms under construction is the lowest it’s been in the last five years. “With hotel demand trending downward, unrelenting economic uncertainty and rising construction costs, it’s not surprising that the number of hotel rooms under construction is at a 20-quarter low,” he says.

“More than half of all rooms under development are in the Southern region and mostly outside of the top 25 markets,” he says. “Like most of the pipeline, these rooms are mostly in the two planning phases, and many will likely not be built shortly.”

Here are the latest numbers for the U.S. hotel pipeline in June 2025 (including percentage change from June 2024):

In construction: 138,922 rooms (-11.9 per cent)

Final planning: 266,276 rooms (-0.1 per cent)

Planning: 349,802 rooms (+4.8 per cent)

When the construction numbers are broken down by chain scale, they reflect the bifurcation that has been prevalent in the U.S. hotel industry over the past few years with higher growth numbers in upscale and slower growth in economy. The majority of rooms under construction are located in upscale and upper mid-scale chain hotels.

Here are the construction numbers broken down by chain scale through June, with the percentage of existing supply and in-construction room count:

Luxury: (4.1 per cent/6,443 rooms)

Upper upscale: (2.3 per cent/16,336 rooms)

Upscale: (3.7 per cent/34,047 rooms)

Upper midscale: (3.1 per cent/36,718 rooms)

Midscale: (2.5 per cent/12,715 rooms)

Economy: (0.9 per cent/5,830 rooms)

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