Hotel construction contractors engage in new construction, addition, reconstruction and maintenance projects for the accommodation sector. Through the end of 2023, hotel construction contractors benefited from an increase in demand for services.
Amid improving occupancy rates at hotels in the US and rising consumer spending, construction projects for the accommodation sector came online. Still, despite prosperous industry performance for most of the five-year period, the hampering economic effects of COVID-19 significantly muted industry revenue growth. Due to this, hotel construction revenue has been falling at a CAGR of 7.1% over the past five years and is expected to total $20.1 billion in 2024, when revenue will jump by an estimated 2.8%. Revenue will jump 2024 as the economy continues to recover and construction projects renew. Likewise, industry profit will gradually inch up as demand improves.
Hotel Construction in the US industry analysis
Increased travel patterns as COVID-19 restrictions dwindle boost demand for hotels.
- Domestic trips by US residents rise alongside growing disposable incomes.
General contracting and new construction remain the industry’s largest service.
- Additions and renovations also account for a significant portion of demand.
Hotel construction contractors choose to locate themselves near downstream markets, making the Southeast the most popular choice to set up establishments.
- This region is also home to a significant portion of the US population, making hotel admissions plentiful.
Competitive pricing is key to attracting customers in a relatively low-profit industry.
- Hotel construction contractors must also possess a skilled workforce to accommodate large scale projects.
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