Fewer Independent U.S. Hotels Opting for Brand Conversion

• U.S. hotel conversion activity remains below the long-term average, with 1,103 hotels converting so far in 2024, slightly up from last year but below the 20-year average of 1,424.
• The largest conversion gap to the long-term average is among hotels converting from a brand to independent and vice versa, suggesting that the trend of fewer independent hotels converting to a brand might be becoming the new normal.

In 2024, U.S. hotel conversion activity has remained below the 20-year average. Although conversions have increased slightly from 1,000 hotels last year to 1,103 this year, this is still below the long-term average of 1,424. The biggest shifts were seen in properties switching from branded to independent and those changing to another parent company’s brand.

The largest conversion gap is among hotels converting from a brand to independent and vice versa, with an average of 250 fewer hotels per year making that change over the past three years. This suggests that the trend of fewer independent hotels converting to a brand might be the new normal.

In 2024, 23% of hotels changed brands for the first time since their opening, with a quarter of those moving from a brand to an independent. Of the closed hotels, 307 have reopened this year, most of which retained their original brand.

While new hotel openings have increased to 564, the highest since 2021, they remain below the long-term average of 797. Hotel closures, predominantly among independent properties, remain high at 742, which is still below the peak in 2022 and 2005.

Despite higher interest rates and construction costs holding back new construction, the anticipated increase in hotel conversions, especially from independent stock, has not materialized. This could be due to unsuitable independent hotels for conversion, such as age or location.

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