While most of the world’s hotel markets are easing off the construction throttle, Europe has quietly shifted into a higher gear.
According to CoStar’s September 2025 pipeline data, the continent is the only region showing an increase in hotel construction and planning activity—a surprising turn when nearly every other area is cooling its heels.
Across Europe, 171,589 rooms are currently under construction, up 5.2% year-on-year. Projects in the final planning stage slipped 18.5%, but new plans surged by 14.2%, bringing the total under contract to 428,345 rooms, a healthy 3.7% uptick.
In true British understatement, the United Kingdom leads the charge with 24,540 rooms in the works, followed by Germany’s 22,622, as developers bet on resilient demand and post-pandemic normalisation in corporate and leisure travel.
“Europe’s development cycle reflects long-term confidence rather than short-term volatility,” CoStar analysts noted, pointing to stable financing and strong city fundamentals driving the uptick.
Asia-Pacific: Cooling, Not Collapsing
Across the Asia-Pacific, construction remains robust but shows the first hints of fatigue. The region counts 492,663 rooms under construction, down 3.2%, while total contracts have dipped 0.3%.
Still, with nearly one million rooms in the pipeline, Asia-Pacific remains the world’s largest hotel development zone by volume.
China continues to dominate, with an eye-watering 280,577 rooms under construction, followed by India (41,711) and Vietnam (39,078), reflecting domestic tourism booms and government-led infrastructure pushes.
But the numbers tell a broader story: investors are more selective, chasing yield over volume. “The pipeline’s stabilisation is healthy,” one regional property consultant said. “It weeds out the speculative builds.”
Middle East & Africa: Regional Pockets of Power
Despite the Middle East’s reputation for glittering skylines and perpetual construction, even this region has eased back.
Rooms under construction fell 9.4% to 99,895, with Saudi Arabia and the UAE continuing to dominate activity, 44,771 and 14,685 rooms, respectively.
Yet, optimism lingers. Mega-projects tied to Saudi Vision 2030 and Dubai’s hospitality diversification keep cranes busy. Analysts suggest the current decline is more of a recalibration than a retreat, as projects consolidate into high-impact, mixed-use developments.
Americas: A Pause for Breath
Meanwhile, in the Americas, builders are pausing to count their beans.
The region saw construction drop 8.8% to 190,842 rooms, with the U.S. alone accounting for 138,922, still the lion’s share. Mexico, Canada, and Brazil followed at a respectable distance.
Analysts say the downturn isn’t a crisis but a cyclical correction. Developers are navigating higher construction costs, supply chain snarls, and a cautious financing climate.
“Developers haven’t lost faith,” one U.S. consultant quipped. “They’re just waiting for interest rates to catch up with reality.”
Europe’s Countercyclical Confidence
That brings the story full circle. Once seen as the most cautious of continents, Europe is now building with steady conviction.
Why? Analysts cite diverse demand drivers, cross-border capital, and the return of sustainable financing as key catalysts. Cities like London, Berlin, and Lisbon are drawing investors who see travel and tourism as long-term economic stabilisers rather than luxuries.
The message for property developers is clear: Europe builds while the world slows.
In real estate language, it’s not just about square metres; it’s about timing, confidence, and persistence.
For the full report, visit CoStar Group.
By Kanda Limw
About the Author
Kanda Limw is a self-motivated administrative professional with a strong track record of supporting business operations efficiently and precisely. Highly organised and adaptable, she brings a wealth of skills to the table, from multitasking and prioritising competing demands to managing complex filing systems and ensuring smooth office workflows.
Her background spans professional secretarial work, customer relations, and project planning, where her critical thinking and proactive approach have consistently delivered results. Kanda is experienced in managing directors’ schedules, coordinating meetings, and streamlining administrative processes while maintaining the highest standards of professionalism.
With progressive experience in office management, she has developed a reputation for reliability and attention to detail. Colleagues value her calm under pressure, her ability to anticipate needs, and her dedication to keeping operations on track. Kanda continues to build on her diverse skill set, driving efficiency and excellence in every task she undertakes.
