New hotel development remains an ongoing challenge for the global hotel industry as evidenced by the latest monthly pipeline data from CoStar.
Data from the March global hotel development pipeline shows that the Americas was the only region that overall saw year-over-year increases in activity. Most regions saw mixed pipeline activity when compared to March 2023.
Europe had 172,499 rooms in the construction phase, a 6.8% year-over-year decline. While the number of hotels in the final planning phase dropped 25.3% to 99,744 rooms, the number of rooms in planning grew 3.1% to 160,404.
Within the region, Germany led in-construction activity, with 28,500 rooms. The United Kingdom was next in line with 28,423.
Overall, the total number of rooms under contract fell 8.8% to 432,647.
In the Asia-Pacific region, the number of hotel rooms in the in-construction phase grew by 5.6% to 502,610. Final planning grew as well by 5.6% to 109,926 rooms. However, the number of rooms in the planning phase fell 11% to 289,041, and the total number of rooms under contract dipped 0.4% to 901,577.
China leads the region in total rooms in construction, with 315,145. Vietnam follows with 37,113.
The Middle East and Africa reported negative results in each phase. The number of hotel rooms in construction dropped 7.3% to 110,783. Those in final planning fell 20.9% to 36,173 rooms, while the planning phase dipped 3.3% to 81,316 rooms.
Overall, the total number of rooms under contract fell 8.5% to 228,272.
Most of the pipeline activity in the region occurred in the Middle East, with Saudi Arabia's 42,464 rooms in construction, followed by 19,046 in the United Arab Emirates.
The Americas region stood out with its strong pipeline activity in March. It grew the number of rooms in construction by 4.1% to 205,998. The final planning phase grew by 6.8% to 296,374 rooms, while the planning phase jumped by 36% to 378,628.
The total number of rooms under contract grew 16.9% to 881,000.
Within the Americas, the U.S. led the way in most rooms in construction with 156,525 rooms. The three countries that followed were Mexico with 13,335, Canada with 7,603 and Brazil with 5,799.
In a further breakdown of U.S. pipeline activity in March, the country reported 263,316 rooms in final planning, a 9.8% year-over-year increase. The planning phase jumped by 39.5% to 324,522 rooms.
When looking at the in-construction phase by chain scale segments, luxury led the way in growth, increasing by 4.3% to 6,466 rooms. Upscale and upper midscale followed closely, growing 4% with 35,912 rooms and 3.6% with 42,605 rooms, respectively. Midscale was next, growing 2.9% with 14,733 rooms, followed closely by upper upscale, which grew 2.8% with 19,766 rooms. The economy segment trailed with 1.2% growth and 7,946 rooms.
CoStar defines in-construction hotels to have begun vertical construction on the physical building. Confirmed projects under contract can either fall in the planning phase, where construction will begin in more than 13 months; or the final planning phase, where construction is slated to begin within 12 months.