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Global hotel pipeline trends
Tuesday, 17th August 2021
Source : Lodging Econometrics (LE)

In the latest Hotel Construction Pipeline Trend Report, research analysts report that at the close of the second quarter of 2021, most of the world's hotel construction pipeline dropped with the exception of China.

Little Change in the European Hotel Construction Pipeline Year-over-Year

According to the latest Europe Hotel Construction Pipeline Trend Report from Lodging Econometrics (LE), research analysts report that at the close of the second quarter of 2021, Europe’s hotel construction pipeline dropped 1% by projects and increased 1% by rooms year-over-year (YOY) and ended the quarter with 1,841 projects and 296,843 rooms.

Projects under construction are up 1%, YOY, standing at 934 projects/ 152,549 rooms. Projects scheduled to start construction in the next 12 months saw a small decrease last quarter, closing at 466 projects/73,739. Projects in the early planning stage dropped 2% by projects YOY to 441 projects while rooms increased 1% YOY to 70,561 rooms.

Over the past 18 months, closed borders and the absence of tourism have been a great upset for many European economies. Like the rest of the world, countries in the region are still combating the COVID-19 virus and its variants. However, many are starting to show signs of recovery. The advancement of vaccination programs has enabled many European countries to ease restrictions and now open their borders, each with its own conditions for domestic and/or international visitors. Those that have opened have already seen increases in hotel and flight reservations. Pent-up demand has tourists eager to make plans for late summer. As long as the COVID-19 situation improves, or at a minimum, remains stable in the region and restrictions continue to ease, travel demand is expected to strengthen during the second half of 2021.

The United Kingdom leads the construction pipeline with 345 projects/52,925 rooms. Germany is second with 276 projects/50,304 rooms. France follows with 169 projects/19,948 rooms. Next is Portugal with 120 projects/14,510 rooms, and then Poland with 94 projects/14,074 rooms.

The markets in Europe with the most projects in the pipeline are London with 86 projects/15,717 rooms, Dusseldorf at 52 projects/10,370 rooms, and Paris at 44 projects/6,927 rooms. Next is Lisbon with 35 projects and a room count total of 4,130 and Istanbul follows with 33 projects/6,472 rooms.

The top hotel companies in Europe’s construction pipeline are Accor with 281 projects/40,123 rooms, Marriott International with 218 projects/35,721 rooms, Hilton Worldwide with 205 projects/32,155 rooms, InterContinental Hotels Group (IHG) with 154 projects/23,391 rooms, and the Radisson Hotel Group with 55 projects/10,160 rooms. These five companies comprise 50% of the projects in the total hotel construction pipeline in Europe.

The leading brands for these four companies are Hilton Worldwide’s Hampton by Hilton brand with 80 projects/12,503 rooms. Accor’s Ibis brands follow with 78 projects/9,394 rooms, then IHG’s Holiday Inn Express with 60 projects/9,412 rooms. Marriott International’s Moxy brand ended the quarter with 56 projects/9,635 rooms, and Radisson Hotel Group’s Radisson Blu brand closed with 16 projects/2,646 rooms.

The region had significant growth in new openings during the second quarter, reaching record-highs of 168 new hotels and 24,253 rooms. The LE forecast for new hotel openings shows continued growth for the next several years with a total of 458 new hotels/65,422 rooms opening by the end of 2021, followed by 468 hotels/69,756 rooms expected in 2022, and 461 hotels/74,671 rooms in 2023.

China’s Hotel Construction Pipeline Continues Upward Trend Through the Second Quarter

According to analysts at Lodging Econometrics (LE), the total China construction pipeline stands at 3,454 projects/661,043 rooms. At the end of the second quarter, the 2021 construction pipeline is up 2% by rooms year-over-year (YOY) and just below the region’s all-time high project count of 3,574 projects/647,704 rooms set in the second quarter of 2020. This is the fourth consecutive quarter China’s pipeline has increased.

China currently has 2,401 projects/437,731 rooms under construction, up 5% by projects and 7% by rooms YOY, while projects scheduled to start construction in the next 12 months are down 6% by projects and 11% by rooms, standing at 556 projects/103,958 rooms. Projects in the early planning stage are at an all-time high, up 10% by projects and 12% by rooms YOY and standing at 497 projects/119,354 rooms at the end of Q2. The increases in projects in the under construction and early planning stages can be attributed to a record number of new upper upscale, upscale, and upper midscale projects recorded during Q2’21. According to LE’s market intelligence team, previously delayed projects that have been on hold over the past year, due to COVID-19, are now advancing and expected to increase over the next few quarters as construction in China resumes.

Chengdu leads China’s pipeline at the end of Q2’21 with 138 projects, a record-high number of projects, having 28,009 rooms. Shanghai follows with 123 projects/23,891 rooms. Next is Guangzhou, standing at 121 projects/24,836 rooms, then Wuhan with 101 projects/14,064 rooms, and Xi’an with 93 projects/16,395 rooms.

The three top franchise companies in China’s construction pipeline reached record highs during the second quarter. Hilton Worldwide hit a record-high of 634 projects as well as a record-high count of 120,697 rooms; InterContinental Hotels Group (IHG) also reached a record-high of 444 projects, accounting for 92,342 rooms; and Marriott International saw an all-time high of 394 projects/105,961 rooms. Next is JinJiang Holdings, with 218 projects/21,394 rooms, and Accor with 183 projects/32,839 rooms. These five companies make up an impressive 54% of projects and 56% of rooms in China’s total hotel construction pipeline.

The leading brands in the construction pipeline for these companies are Hilton’s Hampton by Hilton with a record-high of 362 projects/55,084 rooms; IHG’s Holiday Inn Express also reached record-high counts this quarter with 209 projects/34,788 rooms; JinJiang’s 7 Days Inn brand with 102 projects/8,031 rooms; Accor’s Ibis brands with 66 projects/6,976 rooms; Marriott International’s Marriott Hotel brand closed the quarter with 63 projects/19,130 rooms.

China’s new hotel openings in the first half of 2021 were 221 hotels/37,227 rooms, with a record low of 82 projects/15,507 rooms opening during the second quarter. The LE forecast for new hotel openings expects another 622 projects/90,586 rooms to open in the second half of 2021, bringing expected new hotel openings to 843 projects/127,813 rooms by year-end. In the years following, 984 new hotel openings with 158,810 rooms are expected in 2022 and 735 projects/147,278 rooms in 2023.

Asia Pacific’s Construction Pipeline, Excluding China, Experiences Slight Decline in Q2’21

According to the recent Asia Pacific, excluding China, Hotel Construction Pipeline Trend Report from Lodging Econometrics (LE), the region’s total construction pipeline dropped to 1,701 projects/364,487 rooms, down 11% by projects and 10% by rooms, year-over-year (YOY). At the end of the second quarter, the region has 852 projects with 195,940 rooms under construction. Projects scheduled to start construction in the next 12 months stand at 390 projects/73,447 rooms and projects in the early planning stage stand at 459 projects/95,100 rooms.

Countries in the Asia Pacific region continue to face the on-going effects of the COVID-19 pandemic to varying degrees. Some border closures and other travel restrictions have had a significant impact on the region’s economies, which rely heavily on tourism. While breakouts, emerging variants, and slow-to-rollout vaccines have prolonged the road to recovery for many countries in the region, there are positive signs for the industry’s recovery and post-pandemic future, as many developers are optimistic and ready to move forward with long-delayed plans.

Countries with the largest pipelines in the Asia Pacific region, excluding China, are led by Indonesia, with 318 projects/51,197 rooms. India follows with 282 projects/37,617 rooms, then Vietnam with 180 projects/70,135 rooms. Next are Thailand with 135 projects/32,135 rooms and Japan with 133 projects/27,567 rooms. These five countries account for 62% of the pipeline projects in the Asia Pacific region, excluding China.

Asia Pacific markets with the largest construction pipelines are led by Jakarta, Indonesia with 71 projects/12,376 rooms. Next is Seoul, South Korea, with 63 projects/12,300 rooms, and Bangkok, Thailand with 48 projects/12,033 rooms. Kuala Lumpur, Malaysia follows with 45 projects/13,406 rooms, and Phuket, Thailand with 30 projects/6,637 rooms.

The top franchise companies in the region, accounting for 47% of guest rooms in the total construction pipeline, are Marriott International with 260 projects/56,159 rooms; Accor with 217 projects/49,819 rooms; InterContinental Hotels Group (IHG) at 142 projects/29,154 rooms; and Hilton Worldwide with 90 projects/21,089 rooms; and Hyatt Hotels with 72 projects/14,297 rooms.

Top brands in Asia Pacific’s construction pipeline, excluding China, are IHG’s Holiday Inn at 51 projects/10,229 rooms; Accor’s Novotel and Ibis brands follow with 49 projects/10,879 rooms and 40 projects/7,980 rooms, respectively. Marriott International’s top brands at the close of Q2 are Fairfield Inn with 40 projects/6,334 rooms and Courtyard at 37 projects/7,950 rooms.

Additionally, during the second quarter of 2021, the Asia Pacific region, excluding China, saw 44 new hotels accounting for 7,010 rooms open. The region had 103 new hotels/18,534 rooms open in the first half of the year. There are another 216 new hotels/46,273 rooms expected to open in the second half, bringing the expected total for new hotel openings to 319 new hotels/64,807 rooms by the end of 2021. The LE forecast anticipates new hotel openings to continue ascending with 330 projects/67,241 rooms expected to open in 2022 and 350 projects/64,635 rooms in 2023.

The Latin America Hotel Construction Pipeline Continues to Regress in Q2‘21

Analysts at Lodging Econometrics (LE) state in the Q2’21 Latin America Hotel Construction Pipeline Trend Report, that the total construction pipeline stands at 586 projects/103,011 rooms, down 14% by projects and 13% rooms, year-over-year (YOY). This is the lowest number of projects in the Latin America construction pipeline since the first quarter of 2012.

In the first half of the year, 47 projects/11,657 rooms began construction in the region. New projects announced into the pipeline during the first two quarters of 2021 are down 61% YOY with only 53 projects/9,537 rooms compared to the 87 projects/10,487 rooms announced in the first two quarters of 2020.

At the end of the second quarter, projects currently under construction stand at 314 projects/59,273 rooms, down 9% by projects and 4% by rooms YOY. Projects scheduled to start construction in the next 12 months have experienced the sharpest decline, down 20% by projects and 30% by rooms YOY, closing Q2 at 156 projects/25,536 rooms. Projects and rooms in the early planning stage also experienced a decline YOY, dropping 17% and 12% respectively, and settling at 116 projects/18,202 rooms.

Latin American countries with the most projects in the total construction pipeline are led by Mexico with 209 projects/37,597 rooms. Brazil follows with 109 projects/16,977 rooms, a cyclical low for the country. Following Brazil, Peru closed Q2’21 with 37 projects/4,788 rooms; the Dominican Republic with 21 projects/4,909 rooms, and Columbia with 20 projects/3,174 rooms. Together, these five countries account for 68% of projects in the total pipeline.

Markets in Latin America with the largest pipelines include Lima, Peru with 27 projects/3,862 rooms; Mexico City, Mexico with 25 projects/3,616 rooms; Guadalajara, Mexico with 19 projects/2,679 rooms; Cancun, Mexico with 18 projects/9,510 rooms; and Sao Paulo, Brazil with 15 projects/2,726 rooms.

The top hotel franchise companies in Latin America’s construction pipeline at the end of Q2’21 are Marriott International with 100 projects/16,032 rooms, followed by Hilton Worldwide with 99 projects/15,763 rooms, an all-time high for the Hilton company in the region, then Accor with 94 projects/12,328 rooms, InterContinental Hotels Group (IHG) with 57 projects/6,518 rooms, and Hyatt closed the second quarter at 18 projects/2,880 room. These five companies make up 63% of projects in the total construction pipeline and are forecast to see the highest number of new hotel openings in 2022 and 2023.

Leading brands in the pipeline are Accor’s Ibis brands with 66 projects/8,501 rooms, Hilton Worldwide’s Hilton Garden Inn with 26 projects/3,536 rooms and, Hampton Inn by Hilton with 22 projects/2,653 rooms. These are followed by IHG’s Holiday Inn Express with 15 projects and 1,828 rooms and its Avid brand with 12 projects/1,282 rooms. Marriott’s Fairfield Inn closed the quarter standing at 12 projects/1,724 rooms.

In the first half of 2021, Latin America had 36 new hotels open, accounting for 6,489 rooms. The LE forecast for new hotel openings during the second half of the year calls for another 55 new hotels with 9,517 rooms to open, bringing the total to 91 projects/16,006 rooms by year-end. The forecast for 2022 shows a slight increase to 112 new hotels/19,701 rooms and another increase is expected in 2023, with 128 projects/20,809 rooms.

Canada’s Hotel Construction Pipeline Drops Slightly Year-Over-Year

At the close of the second quarter, analysts at Lodging Econometrics (LE) report that the total construction pipeline in Canada stands at 253 projects/33,240 rooms, down 43 projects or 15% by projects year-over-year (YOY).

While several pandemic waves have slowed Canada’s economic growth in the first half of 2021, the country’s finance department predicts the economy will pick up in the third quarter. As more Canadians become fully vaccinated, more regions have reopened or are considering reopening. Currently, about two-thirds of Canadians are fully or partially vaccinated. As restrictions continue easing, pent-up consumer demand will help to establish some semblance of normalcy. Travel and the hospitality sector are expected to benefit as well.

Projects under construction stand at 71 projects/9,218 rooms, down 28% by projects and 25% by rooms YOY. Projects scheduled to start construction in the next 12 months are at 74 projects/8,645 rooms. Early planning has the most substantial shift in projects YOY, reaching a cyclical peak project count number and showing a 19% increase by projects to end the second quarter with 108 total projects/15,377 rooms. This increase in early planning is typical following an economic slowdown as developers are eager to move from the drawing board into the permitting phase.

Ontario continues to lead Canada’s construction pipeline, standing at 146 projects/17,799 rooms at the end of Q2 and accounts for 58% of the projects in Canada’s total pipeline. British Columbia follows with 37 projects/5,806 rooms, and then Alberta with 23 projects/3,797 rooms, Quebec with 22 projects/3,166 rooms, and Nova Scotia with 8 projects/868 rooms. Collectively, these five provinces account for 93% of the rooms in the country’s total construction pipeline.

The top five markets are led by Toronto with a cyclical high of 63 projects/8,527 rooms and claiming 25% of all the projects in Canada’s total pipeline. Following distantly is Montreal with 14 projects/2,124 rooms, Vancouver with 13 projects/2,096 rooms, Niagara Falls with 12 projects/1,817 rooms, and Ottawa with 9 projects/1,535 rooms. These five markets, combined, account for 44% of the rooms in the total pipeline.

The top franchise companies in Canada’s construction pipeline are Marriott International leading with 66 projects/8,321 rooms, followed by Hilton Worldwide with 64 projects/7,714 rooms, and InterContinental Hotels Group (IHG) with 42 projects/4,247 rooms. These three companies make up 68% of the total projects in the pipeline. The largest brands in the pipeline for each of these companies are Marriott’s Fairfield Inn with 15 projects/1,450 rooms, Hilton’s Hampton by Hilton is the largest brand total in the pipeline this quarter with 26 projects/2,974 rooms, and IHG’s Holiday Inn Express, with 23 projects/2,363 rooms.

In the first half of 2021, Canada had 19 new hotel openings. LE’s forecast for new hotel openings predicts another 29 new hotel openings in the second half of the year, for a total of 48 projects/5,033 rooms to open in 2021 for a supply growth rate of 1.4%. In 2022, LE is forecasting 43 projects/5,344 rooms open, for a supply growth rate of 1.5%, and 2023 will have 54 projects/6,490 rooms open for a growth rate of 1.8%. The 2021 forecast for new hotel openings has Montreal leading with 7 projects/1,000 rooms opening. In 2022 and 2023, Toronto is forecast to top the list with 8 projects/1,182 rooms and 15 projects/2,148 rooms opening respectfully.

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