Southeast Markets Lead Hotel Development Growth Amid Expanding Demand

As featured in "CoStar News"

Chantal Wu, CoStar Analytics, 12 October, 2026

RREAF Holdings' key hospitality markets were recently highlighted in CoStar News as part of an industry analysis examining the continued growth of hotel development across the Southeast. The report emphasized how population growth, business expansion, and sustained travel demand are supporting new hospitality investments, particularly in secondary markets throughout Florida, Tennessee, Alabama, and Georgia.

Read more below for additional insights into the Southeast's evolving hospitality landscape and the market trends shaping new hotel development.

While hotel inventory growth has remained relatively flat nationwide, the Southeast continues to outperform the broader U.S. market in new hotel construction. According to CoStar data, hotel room deliveries over the past 12 months represented 1.7% of existing inventory across the Southeast, compared with 1.1% nationally. Of the region's 51 markets, 32 exceeded the national average, reflecting continued development activity across smaller and mid-sized metropolitan areas.

Several markets throughout Florida and Tennessee have experienced notable increases in hotel supply. Naples, Florida, led the region with a 5.1% increase in inventory, supported by new luxury and extended-stay properties. Chattanooga, Tennessee, also recorded significant development activity, adding approximately 600 hotel rooms over the past year.

The extended-stay segment continues to play an important role in the region's hospitality expansion. In Savannah, Georgia, approximately 55% of newly constructed hotel rooms were extended-stay accommodations, reflecting continued interest in lodging options designed for longer-duration visits.

Looking ahead, the Southeast maintains a strong hotel development pipeline. Rooms currently under construction represent approximately 3.5% of the region's existing hotel inventory, compared with 2.4% nationally. Markets such as Melbourne, Florida; Raleigh, North Carolina; and Birmingham, Alabama, are experiencing continued investment supported by employment growth, business activity, and expanding travel demand.

The report also highlighted the growing diversity of hospitality developments across the region, including luxury resorts, lifestyle hotels, and extended-stay properties. This range of accommodations reflects the different demand drivers influencing hotel investment and development across Southeast markets.

These trends align with RREAF Holdings' broader hospitality investment strategy, which includes beachfront hospitality and extended-stay developments in markets supported by population growth, economic activity, and long-term lodging demand. Through its hospitality platforms, RREAF Holdings continues to evaluate opportunities in markets where underlying demand fundamentals support disciplined development and investment.

We appreciate and thank CoStar News, and Chantal Wu, for providing valuable insight into the continued growth of hotel development across the Southeast and highlighting the market fundamentals shaping the future of the hospitality industry. To view full article, click here.