According to the latest data from Lodging Econometrics, the total hotel-construction pipeline in the Asia-Pacific region, excluding China, is in its fifth year of growth and is at an all-time high of 1,749 hotels with 369,045 rooms. These pipeline totals are up 306 percent by rooms and 270 percent by projects from the cycle’s low of 473 hotels and 90,946 rooms recorded in first-quarter 2007 when LE first began tracking development in Asia.
Countries in the region are facing strong economic headwinds. Economies are slowing and many currencies compared to the dollar are falling, adversely affecting real estate investment. The evidence suggests the pipeline peak may soon be near.
At the end of second quarter, projects currently under construction soared to a record high 968 hotels with 215,523 rooms, as developers rushed to get their projects in the ground. Projects scheduled to start construction in the next 12 months stand at 379 hotels with 74,556 rooms and properties in the early planning stage stand at 402 hotels with 78,966 rooms.
The Asia-Pacific region had 173 new hotels with 30,332 rooms open in the first half of the year, with another 187 new hotels expected to open in the second half, bringing the total forecast for new hotel openings to 360 by the end of 2018. The LE forecast anticipates new hotel openings to continue ascending with 385 new hotels expected to open in 2019 and 399 in 2020.
Top countries in Asia-Pacific’s construction pipeline, excluding China, continue to be led by Indonesia with 394 hotels and 66,759 rooms. India follows with 214 hotels and 33,535 rooms, then Japan with 206 hotels and 41,146 rooms. Next are Thailand with 142 hotels and 34,381 rooms and Malaysia with 140 hotels and 37,332 rooms. Both Thailand and Malaysia show construction pipeline counts at all-time highs.
Cities in the Asia-Pacific region with the largest construction pipelines include Jakarta, Indonesia with 101 hotels and 19,325 rooms; Seoul, South Korea with 80 hotels and 15,490 rooms; Tokyo with 67 hotels and 15,322 rooms; Kuala Lumpur, Malaysia with 57 hotels and 14,974 rooms; and Bangkok with 52 hotels and 11,975 rooms.
The top four franchise companies, accounting for 40 percent of guest rooms in the total construction pipeline, are AccorHotels with 223 hotels and 47,221 rooms and Marriott International with 210 hotels and 48,325 rooms. IHG with 147 hotels and 33,616 rooms follows along with Hilton’s 86 hotels and 18,997 rooms. Both IHG and Hilton show double-digit pipeline growth YOY and their counts are at record highs.
Top brands in Asia-Pacific’s construction pipeline, excluding China, include AccorHotels’ Ibis brands with 74 hotels and 14,811 rooms and Novotel with 46 hotels and 10,765 rooms. Marriott International’s Courtyard has 30 hotels and 5,927 rooms and Sheraton has 27 hotels and 6,560 rooms. IHG’s Holiday Inn has 58 hotels and 14,288 rooms and Holiday Inn Express has 34 hotels and 6,968 rooms, while Hilton Worldwide’s DoubleTree has 31 hotels and 6,474 rooms and the full-service Hilton Hotel & Resort has 27 hotels and 6,719 rooms. IHG’s Holiday Inn and Hilton’s DoubleTree and full-service Hilton Hotel brands also are at record highs.