At the 2020 second quarter close, the Asia Pacific hotel construction pipeline, excluding China, shows continued growth, while China’s pipeline continues to trend upward as well.
According to the recent Asia Pacific, excluding China, Hotel Construction Pipeline Trend Report from Lodging Econometrics (LE), Asia Pacific’s total construction pipeline, excluding China, 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, total pipeline. 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; AccorHotels with 214 projects/45,407 rooms; InterContinental Hotels Group (IHG) at 160 projects/33,721 rooms; and Hilton Worldwide, 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. AccorHotels’ 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 having 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 Worldwide’s top brands include Hilton Hotel & Resort, at a record high, with 34 projects/9,464 rooms and DoubleTree by Hilton with 32 projects/6,446 rooms. Additionally, Hilton’s Garden Inn brand 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.
According to the latest China Construction Pipeline Trend Report, analysts at Lodging Econometrics (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 the starts next 12 month 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 over 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 a 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 Worldwide 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 recording record highs in the country. Next is JinJiang Holdings, with 313 projects/31,260 rooms and AccorHotels 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 Hotel & 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. AccorHotels’ 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.