U.S. hotel construction fell for sixth consecutive month

ARLINGTON, Va. – 16 July 2025 – The volume of U.S. hotel rooms under construction decreased year over year for a sixth consecutive month, according to CoStar’s June 2025 data. CoStar is a leading provider of online real estate marketplaces, information and analytics in the property markets. 

U.S. Hotel Pipeline 
June 2025 (percentage change from June 2024)

• In construction: 138,922 rooms (-11.9%)
• Final Planning: 266,276 rooms (-0.1%)
• Planning: 349,802 rooms (+4.8%) 

“With hotel demand trending downward, unrelenting economic uncertainty, and rising construction costs, it’s not surprising that the number of hotel rooms under construction is at a 20-quarter low,” said Isaac Collazo, STR’s senior director of analytics. “More than half of all rooms under development are in the Southern region and mostly outside of the Top 25 Markets. Like most of the pipeline, these rooms are mostly in the two planning phases, and many will likely not be built in the near future.”

Chain Scale Segments (% of existing supply, in-construction room count)
1. Luxury (4.1% / 6,443 rooms)
2. Upper Upscale (2.3% / 16,336 rooms)
3. Upscale (3.7% / 34,047 rooms)
4. Upper Midscale (3.1% / 36,718 rooms)
5. Midscale (2.5% / 12,715 rooms)
6. Economy (0.9% / 5,830 rooms)

“Most rooms under construction continue to be centered in the middle tier (Upscale and Upper Upscale),” said Collazo. “While we expect the number of these projects to decrease, they will remain the focus of new development for the foreseeable future.”

For more information about the company and its products and services, please visit www.costargroup.com. 

News Media Contact
Haley Luther
Senior Communications Manager – STR 
(216) 278-0627
hluther@str.com 

About CoStar Group, Inc.
CoStar Group (NASDAQ: CSGP) is a global leader in commercial real estate information, analytics, online marketplaces and 3D digital twin technology. Founded in 1986, CoStar Group is dedicated to digitizing the world’s real estate, empowering all people to discover properties, insights, and connections that improve their businesses and lives. 

CoStar Group’s major brands include CoStar, a leading global provider of commercial real estate data, analytics, and news; LoopNet, the most trafficked commercial real estate marketplace; Apartments.com, the leading platform for apartment rentals; and Homes.com, the fastest-growing residential real estate marketplace. CoStar Group’s industry-leading brands also include Matterport, a leading spatial data company whose platform turns buildings into data to make every space more valuable and accessible, STR, a global leader in hospitality data and benchmarking, Ten-X, an online platform for commercial real estate auctions and negotiated bids and OnTheMarket, a leading residential property portal in the United Kingdom. 

CoStar Group’s websites attracted over 130 million average monthly unique visitors in the first quarter of 2025, serving clients around the world. Headquartered in Arlington, Virginia, CoStar Group is committed to transforming the real estate industry through innovative technology and comprehensive market intelligence. From time to time, we plan to utilize our corporate website as a channel of distribution for material company information. For more information, visit CoStarGroup.com. 

This news release includes "forward-looking statements" including, without limitation, statements regarding CoStar's expectations or beliefs regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that U.S. hotel construction in the middle tier does not follow expected trends and that downward hotel demand is due to factors other than those suggested. All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.