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PORTSMOUTH, NH –
Lodging Econometrics (LE), the Industry Authority for Hotel Real
Estate announced the completion and publication of the first-ever
comprehensive Lodging Development Pipeline for all countries in the
Asia-Pacific region.
In Asia, there are 386 actively pursued
construction projects planning an astonishing 111,285 rooms. 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. 68% of all projects will be four- and five-star
hotels, located in Urban Centers and neighboring suburbs, or in resort
and casino destinations.
“LE’s Asia Pipeline covers all countries in
the region from Japan in the north to Australia in the south, and from
Polynesia in the east to Afghanistan in the west,” said Patrick Ford,
President. “It’s been a massive task to compile detailed information
for each individual hotel project in the region. We were encouraged to
‘go global’ by our Wall Street clients who find growing offshore
development to be a significant component of their analysis of
U.S.-based hotel companies and real estate investment groups.”
China, India and Thailand are the Asian
Leaders
China is pulsating with hotel development.
China’s has 188 hotels in the Pipeline, which represents 48% of all
development in Asia. 71,967 rooms are planned. 134 of the 188 projects
are four- or five-star rated and 153 are greater than 200 rooms. 124
projects, or 66% of the total are Under Construction. 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. India’s project count has up
ticked only recently and is evenly distributed over the three
construction stages – Under Construction, Scheduled to Start in the Next
12 Months, and Early Planning. Projects are comparatively smaller,
averaging around 150 rooms. 44% of the projects are located near
outsourcing office centers in cities like Bangalore, Chennai, Hyderabad
and Mumbai. The remaining projects are widely dispersed throughout the
country. 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 is 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.
Lodging Growth is Explosive in Beijing,
Shanghai, Macau, and Inland Manufacturing Centers
Leading the development rush in China are
large cities along the coast and manufacturing centers slightly inland.
With modern infrastructure systems – airports, highways, mass transit,
etc. already in place, and with Pipelines seeded over the last fifteen
years, iconic, world class hotels have been coming out of the ground at
a phenomenal pace.
“It’s a development period like none other,”
said Ford. “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 lead by three cities with some of the
most dynamic Development Pipelines anywhere.”
Beijing, which will host the Olympic Games
in 2008, has 25 hotels in the Pipeline. All but seven are of four- or
five-star quality. 14 are already Under Construction. Recent
statements from Chinese officials indicate a need for another 65 hotels
of various star ratings for the Olympics.
Shanghai, anxious to be once again viewed as
the world-class financial center it was at the turn of the last century
has 24 projects in the Pipeline, 14 of which are Under Construction.
All but five will be four- or five-star operations. Ford said, “The
Pudong region on the east side of the Huangpu River, arguably the most
successful Special Economic Zone (SEZ) anywhere, ever, has been
sprouting world-class hotels in the last three years and will continue
to do so through the end of the decade.”
Macau, already a casino mecca, and the
adjacent destination resort areas of Taipa and Coloane have a total of
23 projects in the Pipeline, nine of which are new Las Vegas-style
casino projects. The average size for the planned projects exceeds 700
rooms. 14 projects are already Under Construction. Ford commented that
the goal for Macau is not to simply rival, but to eventually surpass Las
Vegas as an international gaming destination. Significantly, important
Las Vegas developers are already heavily invested in Macau: Sheldon
Adelson of the Sands/Venetian, MGM Grand and
Steve Wynn.
Another six
secondary cities are enjoying a development boom of between four and
eight four- and five-star projects each. Most are manufacturing centers
and are in the eastern part of the country.
Opportunities
Are Huge for International Hotel Companies
Because the
projects are ultra-luxurious, require incredibly large capital
investments and come with a playing field that is both complex and
highly risky, there is little opportunity for small hotel companies or
investor groups in China. But, 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.
For those
companies, China has been, and will continue to represent, the greatest
opportunity in the world to grow rapidly as an international lodging
company. U.S.-based companies like Marriott, Starwood, Hyatt and
Hilton; 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.
Ford explained,
“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.”
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