Latin America’s Hotel Construction Pipeline Hits Record Highs: 17% Year-Over-Year Growth and a Strong Shift Toward Luxury

Latin America is experiencing one of the most powerful hotel development cycles in its modern history. According to Lodging Econometrics’ (LE) Q3 2025 Construction Pipeline Trend Report, the region has reached unprecedented levels of activity. At the end of the quarter, the pipeline stood at 751 projects and 116,480 rooms, marking a 17% YOY increase in project count and an 11% YOY increase in rooms.

These results highlight the region’s transformation into a global hospitality hotspot, fueled by international brands, rising tourism demand and long-term investor confidence.

A Growing Cycle Across All Development Stages

Momentum is strong across every stage of development.
Latin America closed Q3 with 308 projects / 51,984 rooms under construction, up 14% by projects and 10% by rooms.

Projects scheduled to begin within the next 12 months rose to 211 projects / 32,424 rooms, also showing healthy annual growth.

The most dynamic segment is early planning: 232 projects / 32,072 rooms, up 22% and 18% respectively — evidence of a robust multi-year expansion pipeline.

Renovations and brand conversions also remain active, with 173 projects / 29,200 rooms, signaling modernization across the region’s aging inventory.

Luxury and Upper Upscale Segments Reach Record Highs

The region is experiencing a shift toward high-end development.
The luxury chain scale reached a record 143 projects / 27,387 rooms.
Upper upscale followed with 124 projects / 22,420 rooms, and upscale with 144 projects / 20,904 rooms.

This reflects strong interest in premium hospitality, driven by affluent travelers and brands positioning Latin America as a strategic long-term market.

Mexico, Brazil and the Dominican Republic Shape the Regional Map

Growth remains geographically concentrated.

Mexico hit an all-time high with 264 projects / 40,412 rooms, representing 35% of Latin America’s entire pipeline.
Brazil recorded 123 projects / 16,272 rooms, up 19% YOY.
The Dominican Republic continued its rapid expansion with 81 projects / 17,351 rooms, an increase of 37% in projects and 20% in rooms.

Together, these three countries represent 62% of all projects and 64% of all rooms in the regional pipeline.

Leading cities include:
Mexico City (28 projects / 3,273 rooms), Lima (16 projects / 2,206 rooms), Riviera Maya (16 projects / 2,088 rooms).

Hotel Openings: Strong 2025 and Accelerating Momentum

Latin America saw 45 hotel openings (7,869 rooms) in the first three quarters of 2025.
LE forecasts 80 openings (13,047 rooms) for the full year.

The momentum continues in the outlook:
– 121 new hotels (20,348 rooms) in 2026,
– 134 new hotels (17,072 rooms) in 2027.

This confirms that the region is in the midst of a long-term expansion cycle.

According to analysts at International Investment, the rapid expansion of Latin America’s hotel pipeline is both promising and potentially risky.

Key concerns include:

– Certain markets — especially Mexico — show signs of overheating, with supply growth far exceeding historical norms.
– The rapid shift toward luxury and upper upscale segments may strain demand, particularly if global economic conditions weaken.
– The surge in renovations signals a pressing need to modernize older properties, many of which are outdated for today’s travelers.
– The Dominican Republic’s explosive growth could be constrained by infrastructure limits, especially in resort areas.

International Investment’s final verdict:

Latin America is entering an impressive new era for hotel development, but the pace of growth must be managed carefully. If investment continues to outstrip real demand, the region could face oversupply and declining returns within the next three to five years.