APAC Hotel Construction Pipeline Continues Growth Through Q2

PORTSMOUTH, NH—The latest construction pipeline trend reports for China and Asia-Pacific from Lodging Econometrics (LE) show growth for the region.

Analysts at LE report that China’s total hotel construction pipeline continues to trend upward to an all-time high of 3,574 projects/647,704 rooms. Up 19% by projects and 9% by rooms year-over-year (YOY), this is the 12th consecutive quarter China’s pipeline has increased.

China has 2,282 projects/408,403 rooms presently under construction. Projects scheduled to start construction in the next 12 months experienced a massive increase of 105% by projects and 57% by rooms YOY, to stand at a record-high 842 projects/132,469 rooms. New highs in this stage can be attributed to the announcement of a record number of new upper-midscale and midscale projects into the pipeline as well as delays in new-construction projects that were announced in the second half of 2019 and were stalled at the beginning of 2020 due to COVID-19. These projects are expected to advance during the next few quarters as construction in China has resumed. Projects in the early planning stage stand at 450 projects/106,832 rooms, up 11% by projects and 6% by rooms YOY. In the second quarter of 2020, China only opened 101 new hotels with a record-low number of rooms totaling 14,150.

Guangzhou leads China’s pipeline with 140 projects, a record-high number of projects, having 27,753 rooms. Chengdu, also at an all-time high project count, follows with 134 projects/27,073 rooms. Next is Shanghai at 125 projects/23,666 rooms, then Wuhan with 102 projects/14,010 rooms and Xi’an with 95 projects/16,714 rooms.

Franchise companies topping China’s construction pipeline are Hilton with 529 projects/106,986 rooms, InterContinental Hotels Group (IHG) with 405 projects/86,455 rooms, and Marriott International with 341 projects/93,181 rooms. All three of these companies are recording record highs in the country. Next is JinJiang Holdings, with 313 projects/31,260 rooms and Accor with 209 projects/34,684 rooms.

The pipeline’s brands are dominated by Hampton by Hilton, at an all-time high, with 321 projects/49,427 rooms. Hilton’s second-largest brand is DoubleTree, with 65 projects/17,789 rooms. IHG’s leading brand in China is Holiday Inn Express, at a record count, with 196 projects/33,619 rooms and then Holiday Inn with a record number of projects at 66 projects/16,136 rooms. Marriott International’s top brands are Marriott Hotels & Resorts with 74 projects/22,419 rooms and Fairfield Inn with 44 projects/6,814 rooms. Leading brands for JinJiang Holdings are Vienna Hotel with 133 projects/12,952 rooms and 7 Days Inn with 108 projects/8,496 rooms. Accor’s leading brands are the Ibis brands with 86 projects/9,052 rooms, and Mercure Hotel, at an all-time high, with 62 projects/10,043 rooms.

According to research by LE’s market intelligence team, hotel construction projects in most major cities have resumed and we can expect a flurry of construction to occur during the second and third quarters of this year. Many developers are estimating a delay in projects of only a couple of months.

The pipeline for the rest of Asia-Pacific grew to 1,906 projects/404,520 rooms, up 6% and 3% respectively, year-over-year (YOY).

The region currently has 996 projects, a cyclical peak for the region, and 225,734 rooms under construction. There are 415 projects with 82,122 rooms scheduled to start construction in the next 12 months, and 495 projects/96,664 rooms in the early planning stage, up a remarkable 19% by projects and 12% by rooms YOY. Additionally, during the second quarter of 2020, the Asia-Pacific region, excluding China, saw 39 new hotels, accounting for 8,863 rooms open.

Countries with the largest pipelines in Asia-Pacific, excluding China, are led by Indonesia, with 345 projects/56,373 rooms. Next is India with 263 projects/35,839 rooms, and Japan with 243 projects/46,852 rooms. These three countries account for 45% of the projects in the Asia-Pacific excluding China. Australia follows with 179 projects/33,672 rooms and then Vietnam with 157 projects/62,085 rooms.

Asia-Pacific cities with the largest construction pipelines are led by Jakarta, Indonesia, with 78 projects/13,508 rooms. Next is Seoul, South Korea, with 67 projects/13,233 rooms and Tokyo, Japan, with 59 projects/14,216 rooms. Kuala Lumpur, Malaysia, follows with 50 projects/13,325 rooms and Bangkok, Thailand, with 50 projects/12,711 rooms.

The top four franchise companies in the region are Marriott International, at an all-time high, with 294 projects/63,558 rooms; Accor with 214 projects/45,407 rooms; IHG at 160 projects/33,721 rooms; and Hilton, also at an all-time high, with 99 projects/22,797 rooms.

Top brands in Asia-Pacific’s construction pipeline, excluding China, are Marriott International’s Fairfield Inn at 51 projects/7,495 rooms and Courtyard at 40 projects/8,295 rooms, both at record highs by project count. Accor’s Ibis brands have 46 projects/9,080 rooms and Novotel has 41 projects/9,973 rooms. IHG’s top brands are Holiday Inn with 58 projects/12,100 rooms and Holiday Inn Express with 30 projects/6,063 rooms. This is followed closely by IHG’s InterContinental Hotels, having record high counts, with 21 projects/4,986 rooms. Hilton’s top brands include Hilton Hotels & Resorts, at a record high, with 34 projects/9,464 rooms and DoubleTree by Hilton with 32 projects/6,446 rooms. Additionally, Hilton Garden Inn has hit a record high this quarter with 22 projects/4,560 rooms.

Asia-Pacific was one of the first regions of the world to successfully control the spread of COVID-19. This allowed for hotel construction to gradually restart at the end of April, causing only slight delays to project timelines. While the region has begun to see a resurgence of COVID-19 in some areas, it has not had a significant impact on hotel development and most developers are optimistic that projects will continue as planned.