Listed hotel brands need to keep growing. For a long time they could rely on ground-up development growth to keep the numbers ticking over. That started to stutter post-Covid in the new inflationary environment, making it much more difficult for projects to gain viability given the cost of concrete, steel, wood etc.
The big hotel brands managed to compensate through aggressively growing their conversion offerings, enabling them to flag unbranded hotels and convert hotels from their rivals’ network.
And while conversions will still be a big focus, it seems like there is better news on the new build front.
Speaking on the company’s Q3 earnings call, Hilton CEO Chris Nassetta highlighted the growth.
“New development construction starts in the US were strong during the quarter. And for the full year, we expect global new development starts to finish up nearly 20 per cent and up over 25 per cent in the US year-over-year,” Nassetta said.
Unsurprisingly for a hotel CEO Nassetta is incredibly optimistic about the future of the industry and thinks there is even more potential.
“Even with this year-over-year growth, new development construction starts remain below 2019 levels, implying strong continued runway for growth. Our record-setting pipeline, combined with conversion momentum and acceleration in construction starts will continue to fuel our growth in the coming years,” he said.
Other hotel executives, while maybe not as effusive as Nassetta, were also in positive spirits.
“As I've been saying for a couple of years now it's a grind forward, not a V-shaped acceleration, but our new build signings are still most of our signings around the world. And therefore, we feel that between the strong conversion momentum we've had with our new conversion brands, and we're adding a collection one now, as we mentioned, but we're still getting strong new build signings and openings. So we feel like we've got the pipeline. We've got the momentum. We've got the brands to continue this growth,” said Michael Glover, chief financial officer at IHG Hotels and Resorts.
Wyndham CEO Geoff Ballotti said: “Here in the United States, we grew our mid-scale and above system by over 200 basis points, led by solid conversion activity and some great new construction additions.”
But, but, but.
While it is important to pay attention to how the individual hotel companies are doing, taken as a whole the US hotel construction market is still a mixed bag. Just look at CoStar’s September 2025 data – it is not an especially pretty picture (although if you squint you can still see growth).
