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China's hotel pipeline at new all-time highs

03/18/2019| 1:36:22 PM|

China's total hotel-construction pipeline stands at 2,761 hotels with 580,635 rooms, up 12 percent by hotels and 6 percent by rooms year over year.

In a new report, Lodging Econometrics noted the China's total hotel-construction pipeline stands at 2,761 hotels with 580,635 rooms, up 12 percent by hotels and 6 percent by rooms year over year. At year-end 2018, both hotels and rooms in the construction pipeline were at new all-time highs, surpassing the previous cyclical high of 2,658 hotels set in Q4 2014. 

This growth makes the Chinese pipeline the second largest in the world and should allay any concerns that branded development might be hurt due to the so-called "Apple Effect." In January, RW Baird noted hotel fundamentals are not likely to be affected by the ongoing trade war or at least less affected than companies like Apple, which blamed sagging trade with China for its less-than-stellar performance in late-2018.

The National Pipeline

China currently has 2,044 hotels with 411,032 rooms under construction, up 17 percent and 10 percent year over year, respectively, reflective of the rush to get under construction as the economy continues to soften, according to LE. Hotels scheduled to start construction in the next 12 months are at 351 hotels with 76,063 rooms, down 4 percent and 5 percent year over year. Hotels in the early planning stage year over year are flat at 366 hotels with 93,540 rooms. 

At year-end 2018, China had opened 619 new hotels with 109,524 rooms, 23 percent of all hotels worldwide. The LE forecast for new hotel openings in the years ahead continues to climb as the record number of hotels in the pipeline enter into current supply. Throughout 2019, LE anticipates 671 new hotels with 125,396 rooms will open and 691 new hotels having 132,108 rooms will open in 2020. 

Top Cities, Top Brands

China’s pipeline is led by Guangzhou, with 132 hotels and 28,694 rooms, a 25 percent increase in hotels year over year, an all-time high for the city, according to LE. Shanghai follows with 123 hotels and 25,283 rooms. Next is Chengdu, also at a record high of 109 hotels and 23,478 rooms; Hangzhou with 90 hotels and 17,978 rooms; and Suzhou with 84 hotels and 15,436 rooms.  

Franchise companies topping China’s construction pipeline are led by Hilton with 386 hotels and 86,880 rooms and IHG with 314 hotels and 72,758 rooms. Next is Jin Jiang Holdings with 288 hotels and 33,043 rooms; Marriott International with 283 hotels and 77,340 rooms; and Accor with 186 hotels and 33,683 rooms.   

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TAGS: Lodging Econometrics | hotel pipeline
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