Dallas leads second quarter activity for hotel construction pipeline

Dallas leads second-quarter activity in the hotel construction pipeline, according to a recent report from Lodge Economics.
Dallas leads second-quarter activity in the hotel construction pipeline, according to a recent report from Lodge Economics.

In the recently released second quarter 2022 United States Construction Pipeline Trend Report from Lodging Econometrics (LE), Dallas has the largest activity in the hotel construction pipeline with a record-high count of 173 projects accounting for 20,707 rooms, followed by Atlanta, with 140 projects and 18,131 rooms; Los Angeles, with 124 projects/20,365 rooms; New York, with 113 projects/19,238 rooms; and Phoenix, with 108 projects/14,964 rooms.

According to LE analysts, many major markets and popular U.S. tourist destinations have seen a significant increase in demand throughout the first half of the year. Driven by robust leisure travel, group, and international travel, these markets are reporting the highest occupancy rates since the pandemic began in early 2020.

The five top markets with the most projects currently under construction are New York City, with 78 projects/13,063 rooms; Atlanta, with 25 projects/3,905 rooms; Dallas, with 25 projects/3,725 rooms; Phoenix, with 23 projects/4,955 rooms; and Los Angeles, with 22 projects/3,606 rooms. Collectively, these five markets account for 22 percent of the total number of rooms currently under construction in the U.S. As of Q2 2022, Atlanta has the most projects scheduled to start in the next 12 months, with 62 projects/8,020 rooms. Following up are Dallas, with 55 projects/6,465 rooms; Phoenix, with 49 projects/5,968 rooms; Houston, with 45 projects/4,619 rooms; and Los Angeles, with 43 projects/6,715 rooms. Dallas has the most projects in early planning with 93 projects/10,517 rooms. Los Angeles follows, with 59 projects/10,044 rooms. Next is Atlanta with 53 projects/6,206 rooms; Orlando, with 44 projects/7,640 rooms; and Washington, DC with 40 projects/5,659 rooms.

In the second quarter of 2022, Dallas recorded the highest count of new projects announced into the pipeline with 16 projects/1,654 rooms. Atlanta followed with 11 projects/1,206 rooms; then the Inland Empire, Calif. market with 11 projects/1,113 rooms; Houston with nine projects/929 rooms; and Charlotte, N.C. with nine projects/916 rooms. LE recorded a combined renovation and conversion pipeline total of 1,889 projects with 237,420 rooms for the U.S. The markets with the largest combined number of renovations and conversions are Houston with 42 projects/4,666 rooms, Atlanta with 39 projects/5,246 rooms, Chicago with 34 projects/4,908 rooms, Dallas with 30 projects/3,785 rooms, and San Diego with 28 projects/4,753 rooms.

Twenty-six percent of the new hotels expected to open between now and year-end are concentrated within seven markets. These markets include Austin, Texas, Atlanta, and Nashville.

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