Since 2021, there have been more than three dozen new brand launches across every chain scale. The brand boom allows the big hotel chains to fill the white-space gaps in their portfolios while giving developers unprecedented choice, said Bryan Younge, managing partner, Valuation Advisory, U.S. at Horwath HTL. For example, Hilton’s Spark logged more than 200 deals in negotiation within weeks and IHG’s Garner drew more than 100 owner inquiries on day one.
“New brands are attracting owners because they’re designed for today’s realities: flexible conversion models, leaner operating costs and targeted positioning for high-growth segments like extended stay, wellness and Gen Z travel,” he said. “With strong brand backing and modern tech infrastructure, they offer investors a faster, more capital-efficient path to market and attractive return potential—particularly as legacy assets become harder to reposition competitively.”
The newest brands concentrate on segments that out-performed through the pandemic—select-service, extended-stay and economy—where lean operating models translate into higher margins and record RevPAR, according to Younge. Conversion-friendly equals a faster payback for owners. Garner, Spark and similar concepts were purpose-built for cost-effective conversions or adaptive re-use, helping owners sidestep today’s high construction and interest costs while revitalizing older assets.
“Their appeal lies in their ability to blend modern guest expectations with owner-friendly economics—think modular design, mobile-first service and flexible F&B concepts that reduce labor costs without sacrificing experience,” he said. “They’re tapping into unmet demand, such as multi-week stays, lifestyle-focused travel and soft-branded individuality, offering both market differentiation and operational agility.”
At the end of the first quarter 2025, there are 1,152 projects under construction in the U.S., up 1 percent by projects year over year, according to Lodging Econometrics. Projects scheduled to start construction anytime within the next 12 months total 2,286 projects at Q1, reflecting a 1 percent rise. Most notably, project totals in the early planning stage experienced significant growth, increasing 10 percent by projects year over year, standing at 2,938 projects.
“A lot of that driven by so many new brands, but also people getting ready to get ready,” said Bruce Ford, senior vice president, director of global business development at Lodging Econometrics. “People who acted in 2023 on lower interest rates and began construction were expecting to open this year into an up market. They want to open [their hotels] when the lights are the brightest and the sky is blue and everything's good. Owners expected that that would be this year. But people who are opening this year and then attempting to refinance their construction debt are going to run into a brick wall.”
Also notable is that the timeline for development has very much changed in the past few years. “Pre-pandemic, you signed a deal with a franchise company and you typically had to get in the ground for construction start within 12 months,” Ford continued. “Today, they'll give you two or two and a half years before you begin construction, which is very different.”
Some markets are very frothy with new construction, Ford said but right behind that, some markets frothy with renovations, conversions and sales transactions.
Turning to chain scales, the top three chain scales by total projects at the end of Q1 are upscale at 1,443 projects, upper midscale at 2,338 projects, and midscale at 974 projects. These three chain scales account for approximately 75 percent of the projects in the total U.S. construction pipeline at the end of the first quarter. Notably, however, upper upscale chain scale projects in the U.S. pipeline reached record highs of 362 projects at Q1, up 10 percent year over year. Similarly, the midscale chain scale hit all-time highs at Q1 with 974 projects, increasing 10 percent year over year as well.
This article was originally published in the May edition of Hotel Management magazine. Subscribe here.