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U.S. Hotel Construction Decline Continues for Ninth Month – Image Credit Unsplash
The U.S. hotel industry is experiencing a continued decline in construction activity, with the number of rooms under construction decreasing for the ninth straight month as of September 2025. According to data from CoStar, a leader in real estate analytics, the number of hotel rooms being built has dropped by 12.3% compared to the same time last year, with a total of 137,956 rooms.
Despite the downturn, the industry is still seeing some development, with more rooms currently under construction than in the aftermath of the Great Recession. However, the current figures are more than 80,000 rooms below the peak observed in the third quarter of 2020, marking the lowest point in the past 40 quarters.
Isaac Collazo, STR’s senior director of analytics, highlighted that uncertainty and high construction costs are major factors contributing to this slowdown. Developers and financial institutions are hesitant to move forward with new projects until a more favorable economic environment emerges.
The decline is evident across various hotel chain scale segments, with luxury and upscale categories seeing a slight decrease in construction activity. Specifically, the luxury segment accounts for 3.8% of the existing supply with 5,911 rooms under construction, while the upscale segment has 3.6% with 33,376 rooms being built. The upper midscale segment leads with 39,075 rooms under construction, representing 3.3% of the existing supply.
As the industry navigates these challenges, stakeholders remain cautious, awaiting a shift in economic conditions that could reignite hotel development.
U.S. Hotel Construction Decline Continues for Ninth Month – Image Credit Unsplash
The U.S. hotel industry is experiencing a continued decline in construction activity, with the number of rooms under construction decreasing for the ninth straight month as of September 2025. According to data from CoStar, a leader in real estate analytics, the number of hotel rooms being built has dropped by 12.3% compared to the same time last year, with a total of 137,956 rooms.
Despite the downturn, the industry is still seeing some development, with more rooms currently under construction than in the aftermath of the Great Recession. However, the current figures are more than 80,000 rooms below the peak observed in the third quarter of 2020, marking the lowest point in the past 40 quarters.
Isaac Collazo, STR’s senior director of analytics, highlighted that uncertainty and high construction costs are major factors contributing to this slowdown. Developers and financial institutions are hesitant to move forward with new projects until a more favorable economic environment emerges.
The decline is evident across various hotel chain scale segments, with luxury and upscale categories seeing a slight decrease in construction activity. Specifically, the luxury segment accounts for 3.8% of the existing supply with 5,911 rooms under construction, while the upscale segment has 3.6% with 33,376 rooms being built. The upper midscale segment leads with 39,075 rooms under construction, representing 3.3% of the existing supply.
As the industry navigates these challenges, stakeholders remain cautious, awaiting a shift in economic conditions that could reignite hotel development.
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It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution
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