Report: Excluding China, Asia-Pacific Construction Pipeline Expected to Decline

PORTSMOUTH, NH—According to a recent report from analysts at Lodging Econometrics (LE), Asia-Pacific’s total construction pipeline, excluding China, remains near its high with 1,738 projects (367,886 rooms).

Projects currently under construction stand at 943 projects (211,361 rooms) and projects scheduled to start construction in the next 12 months are at 389 projects (77,390 rooms). These two stages reached their peaks over the last four quarters. There are 406 projects (79,135 rooms) in the early planning stage, which peaked much earlier in 2015.

The pipeline is expected to decline in 2019 as the present development cycle cools. Construction starts have been declining for six quarters while new projects announcements into the pipeline have been declining for five quarters. These two metrics are the most significant for forecasting the future direction of the pipeline.

The Asia-Pacific region had 274 new hotels (48,822 rooms) open at the close of the third quarter, with another 71 new hotels (11,764 rooms) expected to open in the fourth quarter, bringing the total forecast for new hotel openings to 345 by the end of 2018. The LE forecast anticipates that 388 projects (70,037 rooms) are expected to open in 2019, and 406 projects (79,072 rooms) in 2020, the highest levels since LE first began recording in 2007.

Countries with the largest pipelines in Asia-Pacific, excluding China, are dominated by Indonesia, with 400 projects (67,977 rooms), which accounts for 23% of Asia-Pacific’s total pipeline. Next is India with 222 projects (33,785 rooms), then Japan with 203 projects (41,816 rooms). These countries are followed by Thailand with 143 projects (33,855 rooms) and Malaysia with 132 projects (34,853 rooms).

Asia-Pacific cities with the largest construction pipelines are led by Jakarta, Indonesia, with 99 projects (18,820 rooms). Next is Seoul, South Korea, with 74 projects (13,730 rooms) and Tokyo with 62 projects (15,572 rooms). Bangkok follows with 50 projects (11,662 rooms) and then Kuala Lumpur, Malaysia, with 49 projects (12,929 rooms).

The top four franchise companies, accounting for 40% of guestrooms in the total construction pipeline, are AccorHotels with 248 projects (53,196 rooms), Marriott International with 198 projects (45,870 rooms), and InterContinental Hotels Group (IHG), which set a new record high for the company, with 148 projects (33,177 rooms). Hilton follows with 85 projects (18,978 rooms).

Top brands in Asia-Pacific’s construction pipeline, excluding China, include AccorHotels’ Ibis brands with 62 projects (12,440 rooms) and Novotel with 48 projects (10,807 rooms). Marriott International’s Courtyard has 33 projects (6,697 rooms), and the full-service Marriott has 24 projects (6,533 rooms). IHG’s Holiday Inn has 57 projects (13,715 rooms) and Holiday Inn Express has 34 projects (6,838 rooms), while Hilton’s DoubleTree has 30 projects (6,368 rooms) and the full-service Hilton Hotels & Resorts brand has 27 projects (6,919 rooms). Both the full-service Marriott Hotels and the full-service Hilton Hotels & Resorts brands are at record highs for their respective companies.