According to analysts at Lodging Econometrics (LE), the total China construction pipeline stands at 2,523 projects/556,645 rooms and at the second quarter, the 2018 construction pipeline is slightly less than the all-time high of 2,658 projects/557,716 rooms set in the fourth quarter of 2014 and is up 5% by projects year-over-year (YOY).

Projects presently under construction are at 1,814 projects/389,328 rooms, projects starting construction in the next 12 months are at 367 projects/78,361 rooms, and projects in the early planning stage are at 342 projects/88,956 rooms.

Despite an economic slowdown, a falling stock market, and continued concerns about a possible war on tariffs, pipeline totals remain at or near all-time highs, as the hotel construction boom continues.

New hotel openings in the first half of 2018 were 173 hotels/35,585 rooms. The LE forecast for new hotel openings expects another 461 projects/71,788 rooms to open in the second half of 2018, bringing expected new hotel openings to 634 projects/107,373 rooms by year-end 2018. In the years following, 548 new hotel openings are expected in 2019 and 540 in 2020.

With major global brands developing hotels at a record pace in the period between 2016-2020, new hotel openings will have skyrocketed in size from an average of 144 rooms in 2016 to 244 rooms in 2020. This shift is characterized by far fewer small economy scale projects in the pipeline and an increase of larger upper upscale projects, many of which are part of mixed-use developments.

Shanghai and Guangzhou continue to lead China’s total construction pipeline with 121 projects/24,759 rooms, and 108 projects/26,022 rooms, respectfully. Guangzhou’s construction pipeline is at an all-time high. The city has shown continued growth, rising to a 300% increase in projects since the pipeline bottomed in the second quarter of 2008 with a mere 27 projects. These cities are followed by Chengdu with 88 projects/20,051 rooms; Hangzhou with 79 projects/17,904 rooms; and Suzhou with 74 projects/14,597 rooms.

Top franchise companies in China’s construction pipeline are all hitting record highs. They are led by Hilton Worldwide with 375 projects/84,964 rooms; InterContinental Hotels Group (IHG) with 314 projects/74,611 rooms; and Marriott International with 285 projects/79,663 rooms. These three companies make up an impressive 43% of rooms in the total hotel construction pipeline.

The leading brands in the construction pipeline for these companies are Hilton’s Hampton Inn with 185 projects/28,590 rooms and DoubleTree with 59 projects/19,784 rooms; IHG’s Holiday Inn Express with 137 projects/26,402 rooms and Holiday Inn with 61 projects/16,412 rooms. The leading brand for Marriott International is the full-service Marriott Hotel & Resort with 66 projects/20,531 rooms. All of these brands are at record highs.

www.lodgingeconometrics.com