PORTSMOUTH, N.H. — Analysts at Lodging Econometrics (LE) reported in the latest China Construction Pipeline Trend Report that China’s total hotel construction pipeline continues to trend upward, reaching an all-time high of 3,574 projects/647,704 rooms at the end of Q2 2020. Up 19 percent by projects and 9 percent by rooms year-over-year (YOY), this is the 12th consecutive quarter China’s pipeline has increased.
China has 2,282 projects/408,403 rooms presently under construction as of Q2 2020. Projects scheduled to start construction in the next 12 months experienced a massive increase of 105 percent by projects and 57 percent by rooms YOY, to stand at a record-high 842 projects/132,469 rooms. New highs in the number of projects starting-in-the-next-12-months stage can be attributed to the announcement of a record number of new upper-midscale and midscale projects into the pipeline as well as delays in new construction projects that were announced in the second half of 2019 and were stalled at the beginning of 2020 due to COVID-19. These projects are expected to advance over the next few quarters as construction in China has resumed. Projects in the early planning stage stand at 450 projects/106,832 rooms, up 11 percent by projects and 6 percent by rooms YOY. In the second quarter of 2020, China only opened 101 new hotels with a record-low number of rooms totaling 14,150.
Guangzhou leads China’s pipeline with 140 projects—a record-high—and 27,753 rooms. Chengdu, also at an all-time high project count, follows with 134 projects/27,073 rooms. Next is Shanghai at 125 projects/23,666 rooms, Wuhan with 102 projects/14,010 rooms, and Xi’an with 95 projects/16,714 rooms.
Franchise companies topping China’s construction pipeline are Hilton with 529 projects/106,986 rooms, InterContinental Hotels Group (IHG) with 405 projects/86,455 rooms, and Marriott International with 341 projects/93,181 rooms. All three of these companies recorded record highs in the country. Next is JinJiang Holdings, with 313 projects/31,260 rooms and Accor with 209 projects/34,684 rooms.
The pipeline’s brands are dominated by Hampton by Hilton at an all-time high of 321 projects/49,427 rooms. Hilton’s second-largest brand is DoubleTree, with 65 projects/17,789 rooms. IHG’s leading brand in China in Q2 2020 is Holiday Inn Express at a record count of 196 projects/33,619 rooms followed by Holiday Inn with a record number of projects: 66 hotels totaling 16,136 rooms. Marriott International’s top brands are Marriott Hotel & Resorts with 74 projects/22,419 rooms and Fairfield Inn with 44 projects/6,814 rooms. Leading brands for JinJiang Holdings are Vienna Hotel with 133 projects/12,952 rooms and 7 Days Inn with 108 projects/8,496 rooms. Accor’s leading brands are the Ibis brands with 86 projects/9,052 rooms and Mercure Hotel at an all-time high of 62 projects/10,043 rooms.
According to research by LE’s market intelligence team, hotel construction projects in most major cities have resumed and we can expect a flurry of construction to occur during the second and third quarters of this year. Many developers are estimating a delay in projects of only a couple of months.
