Portfolio expansion was a major marker of growth for hotel companies in 2023.
Throughout the year, industry players hit development milestones. Choice Hotels International expanded its extended stay WoodSpring Suites brand at record pace, and Marriott International, Wyndham Hotels & Resorts, Hilton and Hyatt Hotels Corporation all posted record development pipelines in the third quarter.
Several companies launched new brands in the midscale segment, particularly in the extended stay and conversion spaces, to keep up with growing demand from developers, franchisees and travelers alike.
Development in the upscale and luxury segments also flourished, with project counts dominating the U.S. hotel construction pipeline, according to Lodging Econometrics.
But will the hospitality trends that drove hotel development and portfolio expansion last year continue to do so in 2024? Six development leaders — one each from Hilton, Marriott, IHG, Choice Hotels, Wyndham and Hyatt — shared with Hotel Dive their outlooks on the development landscape and their companies’ strategies for the new year.
Responses have been edited for length and clarity.
“Across the industry, supply chain issues and construction costs have moderated when compared to the last few years, and even with increased lending costs, quality brands can still be financed, so we expect [Hilton’s] signings and construction starts to remain robust.”
Bill Fortier
SVP of development – Americas, Hilton
More from Fortier: Hilton anticipates 2024 will be a good year for individual and multi-unit development announcements for its newly launched extended stay brand Project H3, with its first property slated to open in summer 2024. Additionally, positive momentum with hotel conversions is likely to continue, bringing growth for the company’s other new brand, Spark by Hilton.
“[Marriott] sees terrific opportunity going forward in the midscale segment with our launch of StudioRes in the U.S. and Canada. We worked closely with our owners and developers to reimagine design, cost to build, and cost structure, to inform every aspect of the brand. The response from our development community has been extremely positive as we prepare for projects to break ground in early 2024.”
Noah Silverman
Chief global development officer – U.S. and Canada, Marriott International
More from Silverman: As the hospitality industry continues to see demand for travel and personalized experiences over goods, Marriott will continue growth in the luxury space, with 24 openings in its global pipeline. Additionally, conversions remain a high priority and are expected to remain a significant part of Marriott’s rooms growth strategy. So long as the hotel construction financing environment continues to challenge new construction, conversions will be a desirable option.
“Heading into 2024, [IHG] continues to see growing interest in the midscale space along with rising demand for conversion-ready hotels. STR estimates the U.S. midscale market will rise in revenue value from $14 billion today to $18 billion by 2030 as travelers seek more affordable lodging options and more owners move to either get into — or grow their reach within — this potential-rich space.”
Kevin Schramm
SVP of development, mainstream brands – U.S. and Canada, IHG Hotels & Resorts
More from Schramm: Hotel conversions will continue to allow owners to navigate the economic and logistical challenges of new construction and gain faster access to the resources needed to open. IHG’s newly launched conversion brand, Garner, will continue expansion in 2024, with more than 500 hotels anticipated to open during the next decade.
“Despite higher interest rates, Choice is bullish on extended stay. [With] the segment's proven bottom-line performance, reduced labor requirements, and favorable environment of double the demand of purpose-built extended stay product, extended stay has continued to garner attention as one of the hottest segments in the hospitality industry.”
David Pepper
Chief development officer, Choice Hotels International
More from Pepper: Secondary and tertiary markets, including domestic leisure destinations, will continue to gain popularity among travelers. Additionally, artificial intelligence will continue to transform the travel industry. To keep up with changing technology in the hospitality industry, Choice will continue implementing technologies for use internally to, among other functions, help forecast market growth, anticipate how a conversion target would perform as a Choice branded property and estimate how a new construction property may perform.
“The extended stay segment has shown no signs of slowing down. With the historic infrastructure spend across the U.S., we believe there’s a $3.3 billion opportunity for our franchisees in additional room revenue.”
Chip Ohlsson
Chief development officer, Wyndham Hotels & Resorts
More from Ohlsson: Wyndham will focus on the continued growth of its extended stay brands, including ECHO Suites and Hawthorn, in 2024.
“With a shift in lifestyles and work models, [Hyatt] foresees guests and members will continue to travel for extended periods of time.”
Dan Hansen
Global head of Hyatt Studios, Hyatt Hotels Corporation
More from Hansen: Hyatt will continue to expand its extended stay brand Hyatt Studios, launched in April. Initial interest in Hyatt Studios from developers has been strong, with Hyatt signing more than a dozen letters of intent with multi-hotel development groups for more than 125 future hotels along with executed franchise agreements for Hyatt Studios hotels in Portland, Maine, and Marysville, California, both slated to open in 2025.
Correction: A previous version of this article misidentified Hilton. The story has been updated.
