The growing presence of upper-upscale properties in the current U.S. hotel development pipeline suggests increasing developer confidence in business travel demand, hotel analytics firm STR said Tuesday. 

“Upper upscale saw the slowest recovery, but a steady climb in performance and the business travel indicators have supported developer confidence in the segment,” STR VP of analytics Isaac Collazo said in a statement. “The more than 23,000 upper upscale rooms in construction right now represent 3.4 percent of the segment’s existing supply,” he said, noting that figure is above the long-term growth average of 2 percent in the United States.

According to STR, as of March 2023, nearly 240,000 U.S. hotel rooms were in the final planning stages, up 34.6 percent year over year. U.S. hotel rooms in the construction phase were down 0.5 percent year over year at nearly 154,300 rooms. There are more than 232,500 rooms are in the planning stage, down 21.6 percent year over year, according to STR. 

Across luxury, upscale, upper midscale, upper upscale, midscale and economy, luxury shows the highest number of rooms as a percentage of existing supply, according to STR. 

With that said, select-service, including upper midscale and upscale, “continues to grow as well, which is no surprise given how well the segment of the market has regained demand,” Collazo said, adding that “the upper tier of select-service also caters to the business traveler.”