New data from Lodging Econometrics (LE) indicates both growth and declines during the third quarter of 2021. The total U.S. construction pipeline currently includes 4,837 projects and 592,259 guestrooms, which reflects an 8 percent decrease in projects and 10 percent decrease in rooms year-over-year (YOY). Prolonged effects of the COVID-19 pandemic continue to result in a reduced inflow of new projects as well as average inflation, rising interest rates, and material shortages.

Projects and guestrooms scheduled to begin construction in the next 12 months are down 14 and 15 percent, respectively, with 1,824 projects and 210,189 guestrooms. Projects under construction are also down with 1,035 projects and 142,239 guestrooms at the close of the quarter.

Although projects in the early planning phases tell a more positive story. There are 1,978 projects and 239,831 guestrooms at this stage—reflecting a 27 and 25 percent increase YOY, respectively.

The renovation and conversion pipeline also remains steady, with conversion projects hitting a cyclical peak at the end of Q3 with 752 projects and 79,024 guestrooms.

A total of 665 new hotels and 85,306 guestrooms opened at the end of Q3 as well, and another 221 projects and 23,026 guestrooms are slated to open by the end of 2021. With an anticipated total of 886 projects and 108,332 to open over the course of this year, analysts also project an increase of openings in 2022 with 970 projects and 110,123 guestrooms.

2023 is expected to herald 961 projects and 111,249 guestrooms.

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