Hotel pipeline outside China reaches a record 2,684 projects in Asia-Pacific

Hotel development in Asia-Pacific is moving in two different directions, with the pipeline outside China expanding to a record level while China’s pipeline edged down at the end of the third quarter, according to Lodging Econometrics.

In its autumn report released Wednesday, November 4, the hotel data firm said Asia-Pacific excluding China reached 2,684 projects and 473,560 planned rooms. Lodging Econometrics said both figures were the highest it has recorded for that market. The pipeline measure includes hotels under construction, projects scheduled to start within 12 months and projects in early planning. It tracks the number of projects and rooms in development, not hotel assets already open or any monetary value.

The figures show a clear regional split. Compared with the firm’s summer report dated August 6, the pipeline outside China increased by 178 projects, or 7.1%, from 2,506 at the end of June to 2,684 at the end of September. Planned rooms outside China rose by 20,588, or 4.5%, from 452,972 to 473,560.

China moved in the opposite direction over the same period. Lodging Econometrics reported that China’s pipeline fell by 81 projects, or 2.3%, from 3,588 at the end of June to 3,507 at the end of September. Planned rooms in China declined by 11,055, or 1.7%, from 632,256 to 621,201.

The data points to a widening contrast within the broader Asia-Pacific hotel market. Outside China, the pipeline is still smaller than China’s in absolute size, but it is growing faster. China remains the region’s largest development market by both projects and rooms, yet its pending supply has softened while the rest of Asia-Pacific has continued to add projects.

Lodging Econometrics also reported stronger annual growth outside China. Compared with the same period a year earlier, the pipeline excluding China was up 19% in projects and 9% in rooms. That gap suggests the number of developments is rising faster than the number of rooms attached to them, meaning growth in the project count has outpaced growth in average scale.

India remains the main driver of the expansion outside China. The country accounted for 1,165 projects and 153,801 rooms, equal to 43% of all projects in the Asia-Pacific pipeline excluding China. That gives India a much larger share of future hotel development than any other market in the region outside China and makes it central to the record total reported for the quarter.

The report also shows that a large part of the pipeline outside China is still some distance from opening. Of the 2,684 projects in the regional pipeline, 1,243 were in early planning and 1,007 were under construction at the end of the third quarter. The remaining projects were scheduled to begin construction within 12 months. That mix matters because it shows that much of the expected supply is not yet close to completion and could still change before it reaches the market.

Actual hotel openings during the first nine months of the year remained well below the number of projects still in development. From January through September, 261 hotels with 32,299 rooms opened outside China, according to Lodging Econometrics. In China, 685 hotels with 96,036 rooms opened over the same period.

Those opening figures help explain why a development pipeline should not be read as the same thing as available supply. A pipeline counts future projects at different stages, many of which may take years to open. It also does not separate how much of a change comes from newly announced developments, projects advancing through construction, completed openings, cancellations or revisions to existing plans.

That distinction is especially important in China, where the smaller pipeline does not by itself show a single cause. A decline in pending projects can reflect hotels opening and leaving the pipeline, projects being postponed or canceled, or developers revising plans. Lodging Econometrics’ data does not break out those factors in the headline pipeline totals.

Even so, the quarter-end numbers show where momentum is strongest. Outside China, the rise in project counts was larger than the rise in room counts, and the market reached new highs in both measures. In China, both indicators moved lower from June levels, though the country still retains a larger overall pipeline than the rest of Asia-Pacific excluding China.

The figures also underline how concentrated future hotel growth is in a few markets. India’s large share means the regional trend outside China depends heavily on that country’s development activity. At the same time, the large number of early-stage projects across Asia-Pacific excluding China shows that much of the reported growth is still in a preliminary phase rather than in the final stages before opening.

Lodging Econometrics presented the data as a snapshot of the hotel development pipeline at the end of the third quarter. For investors, operators and local tourism markets, the report offers a measure of where future supply is planned, but not a guarantee of how much of that supply will ultimately be delivered or when it will open.