By the close of the third quarter, the U.S. boasted 59,569 operational hotels, offering a total of 5,647,346 rooms. The year 2023 witnessed the launch of 345 new hotels, equivalent to 41,114 rooms. The hotel intelligence company had anticipated the addition of 182 hotels and 24,790 rooms in the fourth quarter of 2023, although it did not specify whether that watershed had been reached by year-end.
If those projections reached fruition, the nation's hotel landscape would now encompass 59,751 hotels and 5,672,136 rooms, marking a 1.2 percent year-over-year increase. Looking ahead to 2024, LE projected a steady incremental growth with 664 new hotels and 79,286 rooms, reflecting a 1.4 percent rise year-over-year.
Hotel Construction Figures
Delving deeper into the construction pipeline, the data reveals that, as of 2023’s Q3, 1,063 projects, encompassing 140,331 rooms, were in progress. This equates to an eight percent growth in projects and a four percent uptick in rooms year-over-year. The momentum is expected to intensify this year, as 2,234 projects, housing 257,729 rooms, are slated to commence construction in 2024—a remarkable eight percent and nine percent rise in projects and rooms respectively year-over-year.
From another standpoint, the industry is sitting just shy of hitting an all-time high in terms of projects in their early planning stages. Those currently number 2,407, with 274,616 rooms, representing a seven percent growth year-over-year. These figures come tantalizingly close to breaking previous records, falling short by just 27 projects and 5,296 rooms.
Hotel Renovation Numbers
In a separate but related trend, the realm of renovations and conversions is experiencing an unprecedented boom. As of Q3 2023, a staggering 1,100 projects and 146,757 rooms were undergoing refurbishments or transformations. The momentum remains robust, with the active renovation and conversion pipeline swelling to 1,912 projects and 258,568 rooms—marking a record high in the latter category. LE’s are optimistic these favorable trends will continue, predicting they’ll persist over the next two years.
Hospitality Employment Stats
However, amidst these growth figures, the employment landscape within the leisure and hospitality sector remains depressed since pre-pandemic times. December 2023 saw the modest addition of 40,000 industry jobs. Throughout 2023, the sector averaged a monthly addition of 39,000 jobs—a figure that pales in comparison to the robust addition of 88,000 positions added monthly throughout 2022.
2023’s Closing Sector Stats
During the very last week of 2023, U.S. hotel sector performance showed improvement over the week prior, according to CoStar’s latest data on the week ending December 30. CoStar is a prominent provider of real estate market information, analytics and insights. Because of the incorporation of this latest data, year-over-year comparisons were adjusted downward, STR reported.
People paying in hotel reception (Photo via macniak / iStock / Getty Images Plus)
Specifically, for the week of December 24-30, 2023, the occupancy rate stood at 50.1 percent, marking a 7.1 percent decline from the corresponding week in 2022. The Average Daily Rate (ADR) similarly dipped by 2.8 percent to US$163.58, while Revenue per Available Room (RevPAR) experienced a sharper decline of 9.7 percent, settling at US$82.01. This negative trajectory can be attributed to the fact that the corresponding week in 2022 included New Year's Eve, a traditionally robust period for the hospitality industry.
Delving deeper into regional performances, Miami emerged as a standout among the Top 25 Markets, registering a notable year-over-year surge in occupancy by 3.9 percent to reach 79.6 percent. This uptick was bolstered by events such as the Capital One Orange Bowl and the ensuing New Year’s Eve festivities. In California, the resort destination Anaheim showcased significant growth in both ADR and RevPAR, with spikes of 11.9 percent (reaching US$219.71) and 12.5 percent (reaching US$160.25), respectively.
However, not all markets experienced such positive outcomes. For instance, Las Vegas and Nashville grappled with substantial declines in RevPAR, which plummeted by 28.3 percent (to US$112.79) and 27 percent (to US$80.19), respectively, underscoring the diverse challenges faced by different hospitality hubs in the current landscape.
