Global Lodging Construction & Renovation Market Projects Robust Growth

News Summary

The global lodging construction and renovation market is set for substantial growth, with projections indicating an increase from USD 629.5 billion to USD 1.36 trillion. This growth is driven by rising consumer demand for new hotels, energy-efficient designs, and increased global travel. Hotel types such as full-service hotels have significant market shares, and regions like the Southern U.S. are hotspots for development despite economic challenges. Major construction companies dominate the market, focusing on innovation to navigate challenges ahead.

Growth Forecast for the Global Lodging Construction & Renovation Market

The global lodging construction and renovation market is on a steady growth trajectory, expected to rise from USD 629.5 billion in 2024 to an impressive USD 1.36 trillion by 2034. This growth represents a robust compound annual growth rate (CAGR) of 8.5% from its initial valuation. By 2025, the market is anticipated to reach USD 659.7 billion, signaling strong demand for new lodging facilities.

Market Segmentation and Key Drivers

The lodging construction market is segmented based on various criteria, including material types, project types, and hotel categories. In terms of materials, the market breakdown includes structural materials, building envelope materials, and interior finish materials, alongside MEP (Mechanical, Electrical, and Plumbing) materials and equipment. In 2024, the structural materials segment held approximately 35% of market share and is forecasted to grow at a CAGR exceeding 8% through 2034.

When examining hotel types, full-service hotels comprised 35% of the overall market in 2024, with expectations for similar growth in the coming decade. The varying project types also play a crucial role, with factors like new hotel construction, renovations, and adaptive reuse projects being predominant. The growing demand for smart infrastructure and energy-efficient designs is anticipated to fuel the new hotel construction sector significantly.

Construction Methods Influencing the Market

Construction methods have a substantial impact on market dynamics. Traditional construction techniques are projected to continue dominating the market due to their adaptability and established familiarity in various project scales. Other methods, such as modular and prefabricated construction, alongside advanced and sustainable construction techniques, are gaining popularity but still lag behind traditional methods.

Regional Insights and Market Challenges

In North America, the U.S. holds a commanding lead with roughly 80.5% of the market share, generating an estimated USD 135.8 billion in revenue in 2024. However, the U.S. hotel construction market is facing challenges, marked by a downturn that reflects the lowest levels of construction in two decades. Projected activity has decreased by nearly 12% over the past year due to economic uncertainties and rising costs of labor and materials. In contrast, the Southern U.S. is proving to be a beacon for new hotel developments, with leading markets such as Dallas set to add nearly 25% to its current hotel supply by 2027.

Global Growth Trends

Market forecasts indicate promising growth in international markets. Countries like the UK, China, UAE, and Brazil are expected to see significant advancements in the lodging sector from 2025 through 2034. Notably, while many regions experience growth, construction activity in cities like Boston remains slow due to high costs and limited opportunities for good sites.

Major Players and Ongoing Developments

Several major players, including Barton Malow Company, Balfour Beatty US, and Clark Construction Group, account for approximately 40% of the market share in 2024. Ongoing uncertainty in the economy has affected investor confidence, making them cautious about new hotel projects. The construction industry is adapting, with future forecasts relying heavily on recovery patterns and evolving consumer demands.

Overall, the lodging construction and renovation market is on the brink of substantial expansion, driven by growing consumer preferences, technological advancements, and regional developments despite ongoing challenges.

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Additional Resources

• Global Market Insights
• Travel and Tour World
• The Real Deal
• Banker & Tradesman
• Hotel Investment Today
• Wikipedia: Hotel Industry
• Google Search: Lodging Construction Market
• Google Scholar: Lodging Construction
• Encyclopedia Britannica: Hotel Construction
• Google News: Lodging Construction