Hotel construction booming in China

China’s construction pipeline in the hotel sector has increased by 15% by projects and 8% by the number of rooms, according to a report by Lodging Econometrics. Both figures represent all-time highs for the hotel construction industry. 

Construction growth has been substantially enhanced by the billions of liquidity unleashed by the government last year to offset the manufacturing slump and slowing economy brought about by the escalating trade dispute with the United States. 

The report revealed China has 2,083 projects/414,967 rooms presently under construction, up 21% and 12% YOY, respectively while projects scheduled to start construction in the next 12 months stand at 387 projects/83,074 rooms, both at record highs. Projects in the early planning stage stand at 375 projects/92,768 rooms. 

In the first quarter, China opened 185 new hotels/27,455 rooms. LE anticipates 795 new hotels/127,420 rooms will open for all of 2019 while in 2020, 732 new hotels with 124,160 rooms are forecast to open. 

Guangzhou leads China’s pipeline with 128 projects/28,367 rooms, near its high set, in the fourth quarter of 2018. Shanghai follows with 114 projects/22,747 rooms. Next is Chengdu at a record high 110 projects/23,295 rooms. Suzhou with 83 projects/15,092 rooms and Hangzhou with 79 projects/17,415 rooms follow. 

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Franchise companies topping China’s construction pipeline are Hilton Worldwide with 421 projects/86,750 rooms, InterContinental Hotels Group (IHG) with 340 projects/76,861 rooms, and Marriott International with 291 projects/79,860 rooms, all three setting record highs. Next is JinJiang Holdings with 273 projects/31,118 rooms and AccorHotels with 201 projects/35,318 rooms. 

Brands in the pipeline are dominated by Hampton by Hilton, at an all-time high, with 242 projects/38,608 rooms. Hilton’s second largest brand is DoubleTree with 65 projects/18,733 rooms. IHG’s primary brand in China is Holiday Inn Express, at a record count, with 162 projects/29,599 rooms and Holiday Inn with 57 projects/14,880 rooms.