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Portsmouth, N.H. –
Lodging Econometrics (LE), the Global Authority for Hotel Real
Estate, reported to the Lodging Industry that there are a total of 1,555
Hotels with 366,679 rooms in the Construction Pipeline for the 24
countries in the Asia-Pacific region.
LE President, Patrick
Ford, said, “Hotel Development is at a hectic pace— the Pipeline for the
region has reached new record highs.
"Asia is the fastest
growing part of the world,” said Ford. “The region’s capital cities and
financial centers are booming. Business and Tourism travel, along with
convention and meeting business, is on the upswing. Many of the major
markets are enjoying occupancy percentages in the 70's, some even in the
low 80's. For some, average room rates increased at a double-digit,
year-over-year pace in 2006 and again in 2007. As a result, many
markets are nearing peak performance, creating ideal conditions for the
new construction spurt.”
The availability of
investment capital and the accessibility of financing at historically
attractive rates have been key drivers spurring new development across
many real estate sectors, including hotels. Although investors have
considerable interest in hotel acquisitions, few owners are interested
in selling at this time. Holding hotel assets is the preferred
investment strategy— as future rising operating performance will likely
offset any increase in cap rates brought about by upward pressure on
interest rates.
Development in China is
Driving the Region
China has 782 hotel
projects in the Pipeline, having 222,591 rooms. China accounts for 50%
of all planned projects in the Asia-Pacific region and an amazing 60% of
all guestrooms.
China’s burgeoning
Pipeline will soon begin to unfold, as 598 projects / 173,080 rooms – or
78% of China’s Total Pipeline – are presently Under Construction.
That’s the highest ratio of any country in the world. It means the pace
of New Hotel Openings will quicken markedly, as 141 projects / 35,380
rooms are expected to open in the second half of 2007, and 336 projects
/ 87,491 rooms in 2008. China’s development cycle has been underway for
some time. It's been planned to unfold in anticipation of the tourist
boom associated with the Olympic Games in Beijing in 2008.
China’s Major Markets
Have the Largest Pipelines
|
New
Construction Pipeline (Rooms)1 |
|
|
|
Under
Construction |
Starts Next
12 Months |
Early Planning |
Total Pipeline |
|
Projects |
Rooms |
|
Macau |
21,736 |
3,113 |
1,360 |
36 |
26,209 |
|
Shanghai |
17,149 |
3,995 |
2,741 |
96 |
23,885 |
|
Beijing |
15,972 |
1,210 |
1,276 |
71 |
18,458 |
|
Hong
Kong |
9,180 |
2,344 |
1,102 |
50 |
12,626 |
|
|
|
1
Includes only those projects announced into the public
domain, have designated land parcels, and continue to be
pursued by developers. |
 |
|
Source: Lodging Econometrics,
Portsmouth, NH, USA, the Global Authority for Hotel Real
Estate |
|
Shanghai, the mainland’s
primary gateway city, has the largest pipeline, with 96
projects / 23,885 rooms.
Shanghai is a major financial and logistics center, and a main export
hub for China’s inland manufacturers. The city is expected to draw
Olympic visitors next year but is also preparing to host the World’s
Fair in 2010.
Beijing, the capital and
host city, will be the centerpiece of the Olympic celebration and will
showcase China as a growing world power. The city has a robust 71
projects / 18,458 rooms in its Pipeline. A formidable 51 projects /
12,326 rooms are scheduled to open before year-end 2008.
Hong Kong – a world-class
financial and transportation hub – plans to add 50 new hotels to its
census of Open and Operating Hotels. Development will split evenly
between Hong Kong Island and Kowloon. The Hong Kong economy is booming
in anticipation of loosened restrictions that will permit Chinese
investors – both individuals and financial institutions – to invest in
Hong Kong markets.
Macau, already the
leading gaming center in the Eastern Hemisphere, is looking to become a
major convention and meeting destination as well. Macau has 36 projects
/ 26,209 rooms in its Pipeline. Incredibly, 83% of the planned rooms
are already under construction and will soon open.
In these important
markets, many hotel projects are large, iconic structures employing some
of the world’s most famous “starchitects” and designer groups. Most
will carry luxury brand names such as: InterContinental, St. Regis,
Marriott, Hyatt, Hilton, Four Seasons, Shangri-La, Mandarin Oriental,
Banyan Tree, and others. The right brand is essential to positioning
these new hotel projects as world-class destination properties and to
attract international business and leisure travelers.
The total number of
planned guestrooms in Macau, Shanghai and Beijing is huge – exceeded
only by development in Las Vegas, Washington, D.C. and Dubai.
Second Tier Cities Are
Building Feverishly, Too
Five other Chinese cities
have more than 20 projects in the Pipeline. Tianjin has 35; Hangzhou
24; Guangzhou, which will be hosting the 2010 Asian Games, has 24;
followed by Chengdu with 23; and Chongqing with 21. These inland cities
are planning a number of larger, internationally branded projects as
well, generally in “new city areas,” which often feature convention
centers, office towers and upscale residential units as new development
centerpieces.
These second-tier cities
also attract many China-based, mid-market brands that are gearing up to
service the growing travel needs of a burgeoning Chinese middle class.
Brands like Jin Jiang, Motel 168, Jinling, and Wyndham’s Super 8 – who
employs local Joint Venture partners – are prominent in the Pipeline.
In addition, there are
yet another 10 cities with between 11 and 19 hotels under development.
India Is Expanding
Rapidly
India – with 261
projects / 47,467 rooms – has the second largest Pipeline in the
region. Nearly 65% of India's development is concentrated in the cities
specializing in office outsourcing – call centers and “back of the
house” service operations that are driving India’s economy. Bangalore
has 31 projects / 7,371 rooms in the Pipeline, followed by Hyderabad
with 27 projects / 5,407 rooms. There are another 6 markets with
greater than 10 hotels in the Development Pipeline: Pune, Mumbai,
Chennai, Kolkata, Gurgaon and New Delhi. While there are large, 4- and
5-Star branded projects planned for each market, an emerging trend is
the growing number of mid-market brands such as Taj’s new Ginger label,
Accor’s Ibis brand, and Carlson’s Country Inn and Suites – many of which
are being developed with local Joint Venture partners.
Singapore is a city of
particular interest in the region, as it is one of the first markets to
respond directly to the challenges posed by the massive investments in
Macau for gaming, high-end retail shopping, and convention and meeting
business. The government has issued two licenses for casino
development, one to the Las Vegas Sands Group of Venetian Hotel fame,
which has a 2,500-room casino project under construction adjacent to
downtown. The Genting Group of Kuala Lumpur holds the second license
and has started construction on a sprawling resort of Sentosa Island
that will include six hotels with 300 rooms each. A luxury Boutique
Hotel is planned, also a Hard Rock Hotel. Moving towards gaming seems a
necessary step for Singapore in order to assure its pre-eminence as a
leading convention and tourism destination in Southeast Asia.
With economic growth remaining so strong and the future
looking so promising, the future Pipeline for the Asia-Pacific region is
expected to continue to grow. However, with so many projects scheduled
to leave the Pipeline as New Openings, over the next year-and-a-half new
project announcements will recede as markets – Chinese markets in
particular – move to absorb new supply coming online.
Lodging
Econometrics (LE) of Portsmouth, NH is the global authority for hotel
real estate. LE conducts Supply Side research for all markets,
developers, companies and brands worldwide— highlighting such countries
as China, India, and Thailand in the Asia-Pacific region.
Answer
any development or investment question you may have: Inquire today
about LE’s extensive product line:
–Development Pipeline Reports for any market or country include a
Pipeline Summary with a Three-Year Forecast for New Hotel Openings and
all Individual Project Records
–Contact Names for Owners and Management of Open and Operating Hotels
(Census)
–Sales
Comps for all Recent Hotel Transactions
Reports
may be purchased as a: • One-time Order • Quarterly Subscription •
Corporate Site License for Your Intranet.
To
learn more about LE’s products and services, please contact LE at +1
603-431-8740 ext. 25. Or visit online at www.lodgingeconometrics.com.
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