In the recently released report from analysts at Lodging Econometrics, Asia Pacific’s total construction pipeline continues in a four-quarter topping out formation with 1,779 projects/389,830 rooms, up 2% and 6% respectively, year-over-year (YOY).
The region currently has 958 projects/221,927 rooms under construction. There are 391 projects/78,032 rooms scheduled to start construction in the next 12 months and 430 projects in the early planning stage with room counts at an all-time high of 89,871 rooms. Brand conversions are also at an all-time high.
Excluding China, the Asia Pacific region opened 243 new hotels with 43,600 rooms through the close of the third quarter and is forecast to open another 95 new hotels/19,621 rooms by year-end. The LE forecast for new hotel openings will rise in 2020 to 374 projects with a record 77,315 rooms before slowing slightly in 2021 to 360 new hotels/71,077 rooms. In preparation for the 2020 summer Olympics, Japan continues to have the largest count of new hotels forecast to open in the region with 41% of all new hotels in 2019 and 30% in 2020.
Countries with the largest pipelines in Asia Pacific, excluding China, are led by Indonesia, with 375 projects/62,547 rooms, accounting for 21% of Asia Pacific’s total pipeline. Next is India with 236 projects/34,389 rooms, then Japan standing at 211 projects/44,014 rooms. These countries are followed by Vietnam with 134 projects having 56,720 rooms and Malaysia at 134 projects/36,252 rooms.
Cities with the largest construction pipelines in Asia Pacific are led by Jakarta, Indonesia with 84 projects/15,362 rooms. Next is Seoul, South Korea with 73 projects/13,945 rooms and Kuala Lumpur, Malaysia with 54 projects/14,232 rooms. Tokyo follows with 53 projects/12,375 rooms and Bangkok with 46 projects/12,305 rooms. Kuala Lumpur, Jakarta, and Seoul all have pipelines higher than 25% of their existing supply of open and operating hotels.
The top four franchise companies, accounting for 41% of all the projects and rooms in the pipeline, are: Marriott International with an all-time high of 258 projects/57,839 rooms; AccorHotels with 218 projects/46,092 rooms; InterContinental Hotels Group (IHG), at a record high 162 projects/36,045 rooms; and Hilton Worldwide, also with an all-time high of 91 projects/20,422 rooms.
Top brands in Asia Pacific’s construction pipeline, excluding China, include AccorHotels’ Ibis brands with 56 projects/10,735 rooms and Novotel with 41 projects/10,010 rooms. Marriott International’s two top brands are Fairfield Inn with 40 projects/6,472 rooms and Courtyard at 38 projects/8,044 rooms both at record highs. IHG’s Holiday Inn has 63 projects with 14,136 rooms while Holiday Inn Express has 33 projects/6,950 rooms. Hilton Worldwide’s DoubleTree and its full-service Hilton Hotel & Resorts are also at record highs with 33 projects/6,587 rooms and 30 projects/7,874 rooms, respectively.
China’s Hotel Construction Pipeline Has Grown to Record High
Analysts at Lodging Econometrics (LE) report that at the end of the third quarter of 2019, China’s total construction pipeline has grown to 3,380 projects/628,972 rooms. Currently the country has 2,548 projects with 438,797 rooms under construction with projects scheduled to start construction in the next 12 months at 404 projects with 85,026 rooms. Projects in the early planning stage have 428 projects/105,149 rooms.
Hotel development continues to thrive despite the continued economic struggles in the region and the on-going trade and tariff disputes with the United States. In the third quarter, China announced 661 new projects with 80,692 rooms into the pipeline.
Through the third quarter of 2019, China opened 658 new hotels/92,932 rooms with another 363 new hotels/45,799 rooms forecast to open by year-end. In 2020, 1,084 new hotels with a lofty 157,893 rooms are forecast to open. Should all of these hotels come online in 2020, then China will open the largest number of new hotel rooms since the cyclical peak in 2014. In 2021, following a year of all-time high new hotel openings, LE forecasts that the number of new hotel openings will decelerate to 773 hotels with 135,294 rooms.
Chengdu, at a record high 124 projects having 25,560 rooms, leads China’s pipeline. Guangzhou follows standing at 122 projects with 26,105 rooms, then Shanghai at 119 projects/22,581 rooms. Next is Wuhan and Suzhou with 111 projects/15,457 rooms and 88 projects/14,855 rooms, respectively. Also, notable, with strong room counts, are Hangzhou with 73 projects/15,647 rooms and Xi’an with 80 projects/15,054 rooms.
Four of the seven cities listed above have pipeline increases in excess of 20% of their existing open and operating supply with Chengdu having a pipeline in excess of 30%.
Franchise companies topping China’s construction pipeline are led by Hilton Worldwide with 454 projects/93,644 rooms. Next is InterContinental Hotels Group (IHG) with 375 projects/82,358 rooms and Marriott International with 315 projects/86,151 rooms. All three of these companies are setting record pipeline highs by projects and rooms and account for 34% of China’s total pipeline. Other notable franchise company pipelines are AccorHotels with 218 projects/35,556 rooms and JinJiang Holdings standing at 214 projects/22,548 rooms.
Brands in the pipeline are led by Hampton by Hilton with a record 273 projects/42,645 rooms. Hilton’s second largest brand, by project count, is DoubleTree with 59 projects/16,489 rooms. IHG’s primary brands in China are Holiday Inn Express, at a record count, with 179 projects/31,430 rooms and Holiday Inn with a record 61 projects having 15,435 rooms. Marriott International’s top brands are the full-service Marriott Hotel & Resort, hitting record highs, with 73 projects/22,068 rooms and then Courtyard with 39 projects/10,250 rooms. Leading brands for JinJiang Holdings are 7 Days Inn with 113 projects/8,931 rooms, and Vienna Hotel with 26 projects/3,300 rooms. AccorHotels’ leading brand, Ibis, is also hitting all-time highs with 102 projects/10,888 rooms, while Mercure Hotel also has a record number of projects with 58 and totaling 9,346 rooms.