Dallas, Atlanta lead US hotel construction pipeline

Dive Brief:

Dallas and Atlanta were among the top U.S. markets with the largest hotel construction pipelines at the end of this year’s second quarter, according to Lodging Econometrics’ Q2 2023 U.S. Construction Pipeline Trend Report. Dallas’ pipeline reached 184 projects, or 21,501 rooms, at the end of Q2, while Atlanta’s pipeline totaled 141 projects, or 17,993 rooms.
Other markets leading the U.S. hotel construction pipeline at the end of the second quarter were Phoenix with 119 projects, or 16,107 rooms; Nashville with 116 projects, or 15,346 rooms; and Los Angeles with 112 projects, or 17,797 rooms.
Development and investment activity in these markets gained momentum in the second quarter, as major hotel players followed changing leisure and business traveler demand trends.

Dive Insight:

At the end of the second quarter, Dallas and Atlanta also had the most hotel projects scheduled to start construction in the next 12 months. Dallas’ pipeline included 69 projects, or 8,045 rooms, set to start construction in the next year, while Atlanta had 66 projects, or 7,932 rooms.

Lodging Econometrics forecasts that Dallas and Atlana will also top the list of markets with the most hotel openings in 2024 and 2025. Atlanta is expected to see 20 projects open in 2024 and 24 open in 2025. Dallas grabs the next spot on the list — tied with Phoenix — and is expected to see 19 projects open in 2024 and 23 in 2025.

As for U.S. markets with the largest number of new projects announced in the second quarter, Lodging Econometrics found Inland Empire, California, led with a pipeline of seven projects, or 791 rooms. Tampa — a market Melvin Chu, EVP for JLL’s Hotels & Hospitality Group, called a top 25 U.S. market showing positive growth in the hotel sector — followed with six projects, or 986 rooms. Nashville also made the list with six projects totaling 803 rooms.

Additionally, New York had the most hotel projects currently under construction at the end of Q2, with 47 projects, or 8,201 rooms.

Of the leading markets, Dallas has been a hotbed for both development and investment activity of late. Driftwood Capital recently acquired the 299-room Hilton Dallas/Plano Granite Park. At the time of the late-June acquisition, Driftwood Capital CEO Carlos Rodriguez Sr. called Dallas one of the five fastest-growing economies in the U.S. and a location “underpinned by strong corporate and leisure demand.”

Earlier this month, JW Marriott opened the JW Marriott Dallas Arts District hotel in the city, which it called “one of the best cultural epicenters in the South.”

Atlanta also saw significant activity in the second quarter. Hilton announced it will open the newly built Signia by Hilton hotel in March 2024. Spanning 976 rooms, the hotel will be the largest ground-up development in downtown Atlanta in 40 years.