Top Hotel Growth Markets in 2025

The U.S. hotel industry is experiencing steady expansion. With over 100,000 new rooms expected this year according to CoStar, a few unlikely cities are leading the charge. Here's a closer look at what’s driving construction growth. 

1. New York City

The Big Apple continues to dominate hotel development with an impressive 5,719 new rooms. This growth is fueled by post-pandemic tourism recovery, with international visitors returning in force. Business travel is also rebounding as companies resume in-person meetings and conferences. Developers are particularly focused on modernizing older properties and creating boutique experiences to meet evolving traveler preferences for unique, localized stays.

2. Nashville

Music City's hotel boom continues with 2,849 new rooms. Nashville's growth stems from its expanding entertainment scene, major sports events, and growing corporate presence. The city has successfully positioned itself as both a leisure destination and business hub, attracting travelers year-round. New hotels are opening not just in downtown, but in emerging neighborhoods where developers can capture visitors seeking authentic local experiences while maintaining proximity to attractions.

3. San Diego

San Diego's 2,818 new hotel rooms reflect its strengthening position as a premier coastal destination. The city's perfect climate, diverse attractions, and booming convention business are driving demand. New development is occurring along the waterfront and in revitalized urban districts. The post-pandemic emphasis on wellness is particularly evident here, with many new properties incorporating extensive spa facilities and access to outdoor recreation.

4. Dallas

With 2,749 new rooms, Dallas continues its impressive growth trajectory. The Dallas-Fort Worth metroplex benefits from corporate relocations, a thriving tech sector, and its position as a key connecting hub. New hotels are targeting both business travelers and weekend tourists exploring the city's expanding cultural offerings. The trend toward mixed-use developments is particularly strong in Dallas, with hotels integrated into larger projects that combine retail, dining, and office space.

5. Phoenix

Phoenix rounds out the top five with 2,483 new rooms. The desert city's growth is tied to year-round sunshine, major sporting events, and its expanding role as a convention destination. Many new properties are focused on sustainability, incorporating desert-appropriate design and energy-efficient technologies. The greater Phoenix area, including Scottsdale, is seeing particular interest in luxury resorts that capitalize on the natural landscape while offering premium amenities.

Conclusion

With the exception of New York City, hospitality growth is leading in the South and Southwest United States. A combination of milder climates, entertainment attractions, and business event spaces make these unsaturated cities a gem for development. Which destination is on your travel list next?

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