Hotel Development Heats Up Across the Americas — Here’s Where There’s Growth

Glenn: Hey, everybody. Hospitality, friend. Glenn here. Listen, we already know gives you the power to profit, but now they’re giving you more actionable insights to drive that profitability. Do me a favor. Take a moment and check out HotelData.com. You’re getting set for budget season, right? And this new benchmarking data is going to help compare your hotel’s performance for the rest of 2025 and into 2026. Please check out hoteldata.com or the classic actabl.com. Have a great day and enjoy the show! Hey everybody, it’s your hospitality. Friend Glenn back here with our great buddy, our great buddy Bruce, board of Lodging Econometrics. And we’re going to be investigating what’s going on in the hospitality construction pipeline. Bruce, today we’re taking it beyond the United States. And as you said, we’re going to tip Canada all the way down to, I guess, Argentina today.

 

Bruce: Working in a little bit more detail. Glenn you know mostly because really the the three hemispheres of, you know, kind of the Americas, the EMEA, the Asia Pacific, they do work together. In many cases, in terms of historical trends, they typically follow along, if you will. So one of the things that we’ve seen, you know, as a for instance, in Latin America, the announcements have really begun to pick up, okay for new projects also in Canada. There was kind of an announcement today from Choice’s earnings call that they’ve purchased back the franchising rights to all their brands in Canada so that they can franchise them directly. So the tuning of the dials in some opportunities, because when choice did that a long time ago, they only had 7 or 8 brands. Now they have 22. Okay. So rather than, you know, expand that agreement, they chose to kind of run their own franchise operations in the in the market up there.

 

Glenn: That’s fascinating to me and.

 

Bruce: Also speaks to.

 

Glenn: The majority of the the hospitality market, because I remember when we were coming up back in the day, there was a lot of master franchise agreement deals. I don’t see that reliance on it as much anymore.

 

Bruce: No, there’s not a lot of reason to do it. Other than I think China is probably the new frontier for that, of course. Hilton did that with the Hampton Inn brand in China. And that’s turned out to be pretty good because at some 400 in the pipeline right now and it’s moving and cooking good.

 

Glenn: That is cooking pretty good.

 

Bruce: Right. So choice is big. It’s statement on that was really the extended stay expansion. They only had one of their extended stay brands under agreement with that franchise or so. Now they’re going to be able to push all their extended stay brands up there. We actually have an ever home that’s opening in my town in Portsmouth, New Hampshire. Coming soon.

 

Glenn: Next. Yeah. Congratulations. Make sure you check out my video with Matt McKellar of Choice Hotels, focused on the first advertising campaign for extended stay. Bruce, I want to look at the numbers that are out there today. So let me take a look at what’s going on here in Q2 2025.

 

Bruce: So again, with the Americas, this is adding up everything in Canada, the United States, Latin America, Caribbean, Mexico all of the regions. And again, a common legend across the top, the total new construction pipeline adding up to three project stages of under construction scheduled to start in the next 12 months, and early planning. This is the current size for the Americas 2025. What has opened the first half of this year so far? 2025 what is scheduled to open in the second half of this year? And what you’ll see is, is that it is not nearly what 2026 is scheduled to be. Okay, 2026 is going to be a big opening jump year. Based upon what we see in the marketplace today.

 

Glenn: So it.

 

Bruce: Sounds to me.

 

Glenn: Bruce, that there was a real big slowdown, maybe during that Covid post-Covid second.

 

Bruce: Half of 24. Early 25, people were trying to determine what the market was going to do as a result of the administration change in the United States, some economic uncertainty, some inflation, some cost of money concerns. Now we have another list of concerns. But at the at this point, people have some certainty as to the economic climate as it relates to how travel is going to react in the United States. And so they’re turning the dials a little bit. Okay. And the dials are let’s sign the deals. Let’s get them in the ground when the money becomes available. And it’s starting to break a little bit. And therefore we’re seeing those openings begin to be scheduled for 26 and 27.

 

Glenn: Right? That makes sense. So are there any particular countries out there that you seeing that are excelling when it comes to smart hotel development versus some others?

 

Bruce: Well, I think it’s fair to say that Mexico has seen quite a high percentage of full service development as has Latin America. Typically, those luxury hotels are built in those regions because they’re under under full service hotels. Many of the cities in the United States have all the full service hotels.

 

Glenn: So we’re talking urban centers as opposed to resort type destinations with many people are familiar with with Mexico.

 

Bruce: Most of the resort stuff that’s being developed is in the Caribbean. Quite a few luxury resorts, quite a few upper upscale resort redevelopments because they had a span of a couple of years where they had a number of hurricanes in the Caribbean, that really kind of decimated some of the supply. So some hotels closed for a little while to redevelop the asset. Right. And some of that is still occurring now in Mexico. They were wide open during the pandemic. Right. Many of the resorts in Mexico and many of those centers that you go to have resort like amenities did very well, received quite a few guests and visitors during the pandemic and as a result, had additional cash flow that may not have necessarily had. So therefore they’re redeveloping, redeploying, renovating, expanding. And some of these markets saw record occupancy. So therefore we’re seeing more development because the occupancy was so good.

 

Glenn: Not only that, but it sounds like with these full service hotels and city centers throughout Latin America that these countries are really coming up economically. We’ve seen a lot of select service development, but to me this feels a little bit more. We’ve arrived on the world stage kind of thing.

 

Bruce: Well, I think the expansion of full service brands in the United States and the announcement of many of them. We’ll see. The natural first and second and third locations go into many of these major urban centers, because the full service brands, if you look at Marriott now, they have about 15 of them, you know, so I mean, that’s that’s a lot of locations in a given market. And they may not have all of their they may not have all of their brands into some of these major cities. And so they want to go in with the full service first, even though it may be a smaller platform. So like we see autographs developed at, you know, sometimes 110 rooms and some of these Latin America markets whereas in the US it would be 250 and greater. Wow.

 

Glenn: Wow.

 

Bruce: So the full service side of the development continues to see more renovation and more conversions. So if we were to add up some of these opportunities, certainly luxury with 242 projects in the new construction pipeline, that’s a pretty big, pretty big number. Okay. And about 140 of those are in the United States, and about a hundred of them are scattered in Caribbean, Mexico, Latin America. So that’s a pretty significant breakdown on the percentage there. So about 140 of the 240 will be in the US, and then 100 of them scheduled in the rest of the Americas. That’s significant. Also on full service when we talk about Asia Pacific in the coming episodes. Glenn. The whole service is really about China, and a significant amount of the properties that are coming in in China are those big, full service hotels that were delayed or paused during the pandemic that will become openings in 25, 26 and 27?

 

Glenn: Well, be sure to tune into that episode coming real soon. But I got to tell you, man, I’m looking at this slide over here with the the Largest construction pipeline numbers there. All US cities. Dallas. Atlanta. Nashville. Austin. Phoenix. What’s going on?

 

Bruce: It’s that smile, Glenn, that they say it kind of starts in the Midwest, and then you smile your way to the coasts. Yeah. Now the real estate development starts. So you’d have any of these markets are in the center of the country? Yeah. And those those are seeing population growth. Those are seeing economic growth. Those are seeing therefore new hotel brands and new hotel locations. My dad would always tell me of Dallas. It’s not overbuilt. It’s under demolished. Yeah. So some of these city or some of these suburban properties that are on these highway exits where they might have been developed with five acres of land 25 or 30 years ago now, could be two hotels. So we’re we’re seeing kind of some of that begin to creep in, particularly with the extended stay and select service product moved together so that you get two Marriott properties on site, one extended stay, one select service, or two Hilton properties on site, one extended stay, one select service. Every one of the franchise companies has that kind of platform that’s really driving extended stay growth. Extended stay was a very big topic on two key earnings this quarter, and it will continue to be as we have more extended stay brands coming. If you listen to Chris Nocera, you might assess that Hilton will have another extended stay product in the market, maybe a boutique style extended stay. That’s kind of what I heard. So I think, you know there hasn’t been a lot of new upscale extended stay brands, so I would bet that that would be the next move.

 

Glenn: I think that makes perfect sense. And for everybody out there, what happens when a market really starts to mature is it starts to splinter into different, you know, price points and, levels. So that’s what I think is happening right now with all the major brands, because Extended stay has been such a fuel for overall growth for their franchise sales guys.

 

Bruce: 100%, and it offers the opportunity to have really low expenses. And I think that that is the the biggest key of why developers like it so much. You don’t need a lot of employees. You don’t need daily housekeeping at the frequency that you do with some other brands. And you need a houseman. You need a one housekeeper, a front desk person, and somebody to manage the breakfast. And that’s about it.

 

Glenn: Yeah. Listen, I would recommend. Every property needs a houseman. Reach out to me. I’m there.

 

Bruce: I promise to make fun of you, Glenn, but you just did it to yourself.

 

Glenn: Oh, well, yeah, that’s a really good point, Bruce Ford, but not as not as good of a point as

 

Glenn: When you see these when you see these big numbers in Dallas, Atlanta, Nashville, Austin, Phoenix. Does that mean to you as an investor that we should be going into that area, or you should avoid that and try to find other areas of growth that haven’t caught on yet?

 

Bruce: Well, the first thing that I see, Glenn, is the average size of hotel. There is just barely over 105 keys. Okay, so that says a lot of areas. That says a lot of select service. The second thing is, is the dual brand or shared site locations is very popular in these places now because it’s a more efficient building.

 

Glenn: Absolutely. It also allows your sales team to really maximize the real estate space.

 

Bruce: Correct. And the and the developer, the the second person to own those dual brand assets. A very happy and satisfied with what they offer. So I think we’re going to keep seeing it.

 

Glenn: I think so too. All right Bruce, as we wrap up, what is your big takeaway today?

 

Bruce: The big takeaway today, Glenn, is that the industry, albeit going to have a little bit of a soft operating year. Has lots of momentum on new construction signings. It has lots of momentum on conversions, it has lots of momentum on transactions and renovations. And I think the product replacement opportunity continues to be three and a half times over new construction. But we’re beginning to see new construction gain some steam again. So it’s important to recognize that the industry is not closed. It’s not going to slow down. It’s not going to stop. Okay. There are a lot of interested investors in the hotel industry as we stabilize these investments and these new brands and these new areas of opportunity and things like extended stay.

 

Glenn: Yeah. So keep following us. We’re going to continue to tell this story right here on No Vacancy News, in cooperation with our friends over at Logic Econometrics. Bruce, it was great seeing you today. It was great seeing everyone here today. And we’ll be back soon with another report on the lodging pipeline. Thanks for watching.