China is the world’s largest hotel property development center outside the United States, according to a leading Asia Pacific hotel real estate report.
The first-ever Lodging Development Pipeline for Asia Pacific publication by Lodging Econometrics, the industry authority for Hotel Real Estate shows there are 386 actively pursued construction projects planning more than 111,285 rooms.
Sixty eight percent of all projects will be four- and five-star hotels, located in Urban Centers and neighboring suburbs, or in resort and casino destinations. According to LE, the average project size is an anticipated 288 rooms, which is certain to fall as the permitting process unfolds and projects migrate forward through the Pipeline.
China was the leader in hotel real estate with 188 hotels in the pipeline with 71,967 rooms planned, which represents 48% of all development in Asia.
A total of 134 out of the 188 projects are four- or five-star rated and 153 are greater than 200 rooms.
“It’s a development period like none other,” LE President Patrick Ford said.
“It’s being ratcheted forward by an explosion of investment capital into the fastest- growing economy in the world.
“China also has the fastest-growing inbound tourist flows of any country and is projected to be the largest tourist destination in the world by 2020.
“China is in a terrific hurry to modernize and possesses an intense desire to build world-class accommodations for the 2008 Olympic Games and for a series of important worldwide exhibitions already scheduled. Lodging development in China is led by three cities with some of the most dynamic Development Pipelines anywhere,” he added.
According to LE, there are 124 projects under construction in China and 46 of them are scheduled to open in the second half of this year.
India has the second largest pipeline with 78 hotel projects planning 12,244 rooms. However, projects are comparatively smaller, averaging around 150 rooms.
Forty four percent of the projects are located near outsourcing office centers in cities like Bangalore, Chennai, Hyderabad and Mumbai.
The publication found 51% are of a one- to three-star economy and mid-market classification reflecting a high level of native travel within the country. Only 38 projects, or 49% are classified as four- or five-star operations.
In third position was Thailand with 39 projects in the pipeline, 31 of which, or 79%, are under construction. Many are part of the redevelopment surge following the tsunami of December 2004.
Ford said the opportunities are huge for international hotel companies in the Asia Pacific.
“…there is enormous opportunity for the major international hotel companies with extensive resources who already have development and operating groups in the region.
“Global brands that have strong reservation systems, popular frequent traveler programs and highly effective convention sales teams are preferred venture partners for the iconic developments,” he added.
According to LE, China has been and will continue to represent the greatest opportunity in the world to grow rapidly as an international lodging company.
US based companies like Marriott, Starwood, Hyatt and Hilto and international companies like Four Seasons, InterContinental, Kempinski and Accor and Asian-based companies like Shangri-La were on the scene early and have made exceptional inroads in the region.
“There has not been such a building spree like this in the history of lodging. The capital inflows are enormous. Development growth is incredible and appears solid at least into the next decade, with a critical proviso that there continues to be political and economic stability,” Ford said.
By Adam Parsons
