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THE U.S. CONSTRUCTION pipeline reached a record level in the first quarter of 2024, according to Lodging Econometrics. The pipeline included 6,065 hotels with 702,990 rooms, showing a 9 percent year-over-year rise in hotels and a 7 percent increase in rooms compared to the previous year. Furthermore, each stage of the pipeline saw year-over-year growth in the first quarter. LE's Q1 2024 U.S. Hotel Construction Pipeline Trend Report showed 1,144 hotels under construction, totaling 141,336 rooms-a 9 percent rise in hotels and a 1 percent increase in rooms compared to the previous year. Hotels set to begin construction in the next 12 months total 2,259, comprising 260,968 rooms, reflecting a 10 percent increase in hotels and an 8 percent rise in rooms year over year, the report said. Both hotel and room counts in the early planning stage increased by 9 percent year over year, reaching record-high figures of 2,662 hotels and 300,686 rooms, respectively.

U.S. EXTENDED-STAY HOTEL room revenues increased by $1.1 billion in 2023, similar to 2018 and 2019, though with a lower relative gain due to a larger room base, according to The Highland Group. All three extended-stay segments reported record-high room revenues in 2023, with the upscale segment leading despite previously lagging behind the pandemic recovery. The 6.1 percent increase in extended-stay hotel revenues outpaced the corresponding 5.5 percent gain reported by STR/CoStar for the overall hotel industry, the report said. However, extended-stay hotel supply experienced its smallest annual increase on record in 2023, at just 1.8 percent. Factors such as re-branding, de-flagging of non-compliant hotels, and sales to other sectors influenced supply fluctuations, a trend expected to persist into the first half of 2024, particularly with older extended-stay hotels remaining on the market. The report also highlighted a 6.6 percent increase in economy extended-stay supply, alongside modest gains in mid-price and upscale segments, primarily driven by conversions. New construction in the economy segment is estimated at around 3 percent of rooms open compared to one year ago.

EXTENDED-STAY ROOM SUPPLY increased by 1.8 percent in February due to it being a leap year, consistent with the average monthly increase observed over the last two years, according to The Highland Group. February marked 29 consecutive months of 4 percent or less supply growth. Additionally, the change in supply has remained below 2 percent for more than two years, with both metrics significantly falling below the long-term average. The 18.8 percent surge in economy extended-stay supply, along with a modest increase in mid-price segment rooms, is largely attributed to conversions, The Highland Group said. Meanwhile, new construction in the economy segment is estimated at around 3 percent of open rooms compared to a year ago. 2024 first half supply trends Supply change comparisons have been affected by rebranding, segment realignment in The Highland Group's database, and the de-flagging of hotels failing to meet brand standards, along with sales to multi-family apartment companies and municipalities, the report said. This trend is expected to persist into the first half of 2024, particularly with older extended-stay hotels still available on the market.

DALLAS LEADS THE top five U.S. markets in the largest construction pipeline as of the first quarter of 2024, according to Lodging Econometrics. The Dallas market has 185 projects with 21,882 rooms, slightly below the record highs at the close of the fourth quarter of 2023. Next came Atlanta, with 153 projects comprising 17,929 rooms, then Nashville with 127 projects and 16,199 rooms, as LE's U.S. Construction Pipeline Trend Report showed. Phoenix followed with 123 projects and 16,198 rooms, and the Inland Empire in Southern California set a new record high with 121 projects and 12,324 rooms. U.S. markets with the most projects already under construction by the end of the first quarter include New York with 47 projects and 7,655 rooms, Dallas with 25 projects and 3,059 rooms, and Nashville with 22 projects and 2,828 rooms. Atlanta had 21 projects and 2,588 rooms, and the Inland Empire currently has 20 projects and 2,181 rooms under construction.

HOTELS IN THE Americas performed above 2019 levels, although RevPAR is stabilizing amidst decreasing consumer travel spending, according to real estate firm JLL. This has affected resort markets heavily dependent on leisure travel. In contrast, urban travel demand is on the rise, driven by group, corporate, and inbound international travel. According to JLL's Global Real Estate Perspective for February 2024, global hotel RevPAR surpassed 2019 levels by 11.7 percent in the first 11 months of 2023. The global urban market strengthened with increased international travel and the return of business and group demand. London, New York, and Tokyo are expected to lead global RevPAR performance in 2024 as urban travel rebounds. Stabilization has weighed heaviest in resort markets, particularly in the Americas and EMEA, while Asia-Pacific continues to accelerate as intraregional travel grows following border reopenings, the report added. Foreign capital, absent since the onset of COVID, is expected to become more active over the next 12 months. Middle Eastern and Asian investors are likely to lead, with urban markets in Europe and select U.S. cities as primary recipients of capital.

U.S. EXTENDED-STAY HOTEL occupancy declined across 59 MSAs in 2023 compared to 2019, primarily due to significant ADR growth over the past three years, according to The Highland Group. Additionally, extended-stay hotel RevPAR surged in more than 80 percent of MSAs, with ten of them, including four major hotel markets, experiencing gains exceeding 10 percent. Despite an 8 percent increase in the number of extended-stay hotel rooms under construction in the 100 largest MSAs over the past year, the figures remain below pre-pandemic levels, the report said. The resurgence in occupancy was notably led by smaller markets, where strong ADR increases and supply expansion played pivotal roles in driving the lowest occupancy recovery indices for MSAs in 2023.