New York City, Nashville to open most hotel rooms in 2025

Travel Boom: New york City and Nashville Lead Hotel Construction

New York City and Nashville, Tennessee, are surging ahead in the race too open the most hotel rooms in 2025, signaling a robust recovery in the travel industry.This expansion reflects the cities’ thriving tourism sectors and consistently strong hotel performance.

travel Powerhouses: Strong Fundamentals Drive Advancement

“Ongoing hotel development and anticipated openings in New York City are not surprising given the market’s status and its high performance in recent years,” said Isaac Collazo, senior director of analytics at STR. “The city has been a major source of leisure and business travel.”

New York City: reaching New Heights

In 2024, New York City welcomed nearly 65 million visitors, a 3.5% year-over-year increase.The city maintained its dominance in occupancy levels, boasting the highest occupancy rate of any U.S. market in both 2023 and 2024. Notably, the luxury hotel segment in Manhattan has proven to be a key driver of revenue per available room (RevPAR) growth, according to PwC. This success is fueling the city’s projected addition of 5,719 hotel rooms in 2025.

Nashville’s Upscale Ascent

Nashville follows closely behind, anticipating the opening of 2,849 hotel rooms in 2025. The upper midscale and upscale chain scales are leading the charge in Nashville, mirroring a national trend. Nationally, the U.S. is projected to open nearly 34,000 upper midscale rooms in 2025, a segment currently leading the in-construction room count, as reported by Lodging Econometrics.

Navigating the challenges and Opportunities

While the outlook for hotel development remains positive, certain challenges could impact construction projects. “Restrictive capital and lending standards, along with high interest rates and construction costs, will keep construction volume well below the high seen in 2019 for some time,” noted Collazo. This environment underscores the importance of meticulous planning and sound financial management for hotel developers.

Looking Ahead: A Luminous Horizon for Travel and Hospitality

The surge in hotel room openings in New York city and Nashville is a testament to the resilience and growth of the travel industry. The continued expansion of the upper midscale and upscale segments presents exciting opportunities for developers, investors, and travelers alike, creating a dynamic and thriving hospitality landscape.

What other cities do you think will experience similar hotel development booms, and why?

Travel Boom: New York City and nashville Lead Hotel Construction

Travel Powerhouses: Strong Fundamentals Drive Advancement

New York City and nashville, Tennessee, are surging ahead in the race to open the most hotel rooms in 2025, signaling a robust recovery in the travel industry. This expansion reflects the cities’ thriving tourism sectors and consistently strong hotel performance.

Interview with Isaac Collazo, senior Director of Analytics (STR)

Archyde: Isaac, thank you for joining us today. The travel industry is experiencing a significant boom, with New York City and Nashville leading the charge in hotel construction.Can you shed some light on the factors driving this trend?

Isaac Collazo: It’s a pleasure to be here. The growth in hotel development in these cities isn’t a surprise, especially when considering their established tourism markets. new York City has always been a major destination for both leisure and business travelers, and Nashville’s popularity as a music and entertainment hub has been steadily rising.

New York City: Reaching New heights

Archyde: New York City welcomed nearly 65 million visitors in 2024, indicating a sustained recovery. What role have those high occupancy rates played in fueling this construction surge?

Isaac Collazo: Exactly.New York City consistently maintains some of the highest occupancy rates in the U.S., driving investor confidence and demonstrating the city’s enduring appeal as a travel destination. The success of the luxury hotel segment in Manhattan, especially in terms of RevPAR growth, further encourages expansion in this sector.

Nashville’s Upscale Ascent

Archyde: Nashville is also experiencing rapid growth. How has that city’s focus on the upper midscale and upscale segments contributed to its hotel development boom?

Isaac Collazo: Nashville’s growth reflects a national trend. We’re seeing a surge in development within the upper midscale and upscale segments, driven by strong demand and attractive profit margins. It’s a segment with proven resilience and sustained growth potential, making it an attractive investment for developers.

Navigating the Challenges and Opportunities

Archyde: While the outlook seems positive,are there any concerns or challenges developers might face?

Isaac Collazo: Capital access and lending remain key considerations. Restrictive lending standards, coupled with high interest rates and construction costs, will likely impact construction volume for the foreseeable future. Meticulous planning,strong financial management,and a clear understanding of local market conditions will be crucial for success in this environment.

Looking Ahead: A Luminous Horizon for Travel and Hospitality

Archyde: what are your predictions for the future of hotel development in these cities and the broader industry?

Isaac Collazo: **The surge in hotel room openings in New York City and nashville illustrates the travel industry’s strong rebound. The focus on expanding the upper midscale and upscale segments presents exciting opportunities for developers, investors, and travelers alike. The future of the hospitality industry is looking radiant, and these cities are poised to be at the forefront of this growth.

What other cities do you think will experience similar hotel development booms, and why?