Data on hotel openings and projects in the planning phase are windows into the past and the future.
Because hotel development is often a yearslong process, the opening of a hotel is indication of past confidence in a market from hotel owners and developers. Many of the hotels that opened in 2022 were delayed even longer than usual due to pandemic challenges, including delays in entitlements, cautious lenders, supply-chain disruption, construction labor shortages and overall increased costs.
Meanwhile, hotels in the planning stage can be an indication of the markets that developers are most confident can yield the highest return on their investments when — or if — the hotel opens years later. The development process is expected to ease over time, and conditions may improve as projects move through the planning, final planning and in-construction phase, but any new project in or entering the planning phase faces all of the aforementioned challenges.
The chart below shows STR pipeline data of the top 10 U.S. markets for both hotels that opened in 2022 and those in the planning phase as of Jan. 4, 2023, by room count. STR is CoStar’s hospitality analytics firm.