China’s Hotel Construction Pipeline Hits Record Highs in Q3

Wednesday, November 15, 2023

In the Q3 2023 China Construction Pipeline Trend Report by Lodging Econometrics (LE), China’s total construction pipeline reached a record high of 3,720 projects with 686,017 rooms. This reflects a 3% increase in projects year-over-year (YOY) and no change in room count. The surge in projects is notably driven by upscale and upper midscale chain scale projects, both reaching peak project and room counts this quarter. The upscale chain scale concluded Q3 with 850 projects/198,277 rooms, while the upper midscale chain scale had 1,222 projects/194,515 rooms. Together, these chain scales constitute 53% of projects and 55% of rooms in China’s hotel construction pipeline.

At the end of the third quarter, there were 2,661 projects out of 480,538 that were being built, an increase of 5% year over year. The number of projects (356 projects/65,606 rooms) slated to begin construction within the next 12 months is impressive. Early-stage projects have increased 9% year over year, totaling a record 703 projects with 139,873 rooms.

In Q3, brand conversions in China reached record highs in both project and room counts. Year-over-year (YOY), conversions increased by 44% in projects and 36% in rooms, totaling 156 hotels with 24,885 rooms. Additionally, construction starts and new project announcements (NPAs) showed significant YOY growth, with 205 projects/35,455 rooms for construction starts and 310 projects/49,874 rooms for NPAs.

The Chinese cities with the biggest pipelines at the end of Q3 are Wuhan (90 projects/12,540 rooms), Guangzhou (108 projects/22,686 rooms), Hangzhou (90 projects/18,917 rooms), Chengdu (a record-high 144 projects/29,207 rooms), and Shanghai (121 projects/23,222 rooms).

In the third quarter of 2023, 468 new hotels, totaling 75,491 rooms, have opened in China. The Lodging Econometrics (LE) forecast anticipates an additional 310 hotels with 44,313 rooms to open in the fourth quarter, bringing the expected total new hotel openings to 778 hotels with 119,804 rooms by the end of the year. Looking ahead to 2024, the forecast predicts 983 new hotels with 156,814 rooms to open, and for 2025, the projection is 899 new hotel openings with 169,363 rooms.

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