CoStar: Investor confidence fuels U.S. hotel pipeline growth in September

THE U.S. HOTEL construction pipeline increased year-over-year in September for the seventh straight month, according to STR. Investor sentiment remains
positive following the Federal Reserve’s September interest rate cut, as shown by continued double-digit growth in the planning and final planning stages of the
pipeline.

In CoStar’s pipeline, 157,253 rooms were under construction in September, a 7 percent increase from last year. An additional 268,190 rooms were in final planning,
up 10.4 percent, while 336,205 rooms were in planning, up 38.4 percent.

“Growth in rooms in construction has accelerated over the last seven months,” said Isaac Collazo, STR’s vice president of analytics. “Despite higher interest rates
throughout 2024, developer appetite has remained strong. With the recent rate cut in September and more on the way, investor sentiment remains positive, as
evidenced by continued double-digit growth across the planning and final planning stages of the pipeline. Upscale and upper midscale continue to account for
about 50 percent of all rooms in the final phase, while luxury and midscale showed the highest growth in rooms in construction, up 48.5 percent and 34.5 percent,
respectively.”