According to analysts at Lodging Econometrics (LE), the total China construction pipeline stands at 3,454 projects/661,043 rooms. At the end of the second quarter, the 2021 construction pipeline is up 2% by rooms year-over-year (YOY) and just below the region’s all-time high project count of 3,574 projects/647,704 rooms set in the second quarter of 2020. This is the fourth consecutive quarter China’s pipeline has increased.
China currently has 2,401 projects/437,731 rooms under construction, up 5% by projects and 7% by rooms YOY, while projects scheduled to start construction in the next 12 months are down 6% by projects and 11% by rooms, standing at 556 projects/103,958 rooms. Projects in the early planning stage are at an all-time high, up 10% by projects and 12% by rooms YOY and standing at 497 projects/119,354 rooms at the end of Q2. The increases in projects in the under construction and early planning stages can be attributed to a record number of new upper-upscale, upscale and upper-midscale projects recorded during Q2. According to LE’s market intelligence team, previously delayed projects that have been on hold over the past year, due to COVID-19, are now advancing and expected to increase over the next few quarters as construction in China resumes.
Chengdu leads China’s pipeline at the end of Q2 with 138 projects, a record-high number of projects, having 28,009 rooms. Shanghai follows with 123 projects/23,891 rooms. Next is Guangzhou, standing at 121 projects/24,836 rooms, then Wuhan with 101 projects/14,064 rooms and Xi’an with 93 projects/16,395 rooms.
The three top franchise companies in China’s construction pipeline reached record highs during the second quarter. Hilton hit a record-high of 634 projects as well as a record-high count of 120,697 rooms; InterContinental Hotels Group (IHG) also reached a record-high of 444 projects, accounting for 92,342 rooms; and Marriott International saw an all-time high of 394 projects/105,961 rooms. Next is JinJiang Holdings, with 218 projects/21,394 rooms, and Accor with 183 projects/32,839 rooms. These five companies make up an impressive 54% of projects and 56% of rooms in China’s total hotel construction pipeline.
The leading brands in the construction pipeline for these companies are Hilton’s Hampton by Hilton with a record-high of 362 projects/55,084 rooms; IHG’s Holiday Inn Express also reached record-high counts this quarter with 209 projects/34,788 rooms; JinJiang’s 7 Days Inn brand with 102 projects/8,031 rooms; Accor’s Ibis brands with 66 projects/6,976 rooms; Marriott International’s Marriott Hotel brand closed the quarter with 63 projects/19,130 rooms.
China’s new hotel openings in the first half of 2021 were 221 hotels/37,227 rooms, with a record low of 82 projects/15,507 rooms opening during the second quarter. The LE forecast for new hotel openings expects another 622 projects/90,586 rooms to open in the second half of 2021, bringing expected new hotel openings to 843 projects/127,813 rooms by year-end. In the years following, 984 new hotel openings with 158,810 rooms are expected in 2022 and 735 projects/147,278 rooms in 2023.