Upscale and Upper Midscale Brands dominate China’s Hotel Construction Pipeline at Q2 ‘23

As seen in the most recent Construction Pipeline Trend Report for China from Lodging Econometrics (LE), the country’s pipeline stands at 3,666 projects/678,965 rooms. At the close of the second quarter, the total pipeline is slightly less than the all-time high of 3,711 projects/704,101 rooms set in the second quarter of 2022.

Projects in the under construction stage in China rose slightly year-over-year (YOY), closing the quarter at 2,655 projects/478,703 rooms. Projects scheduled to start construction in the next 12 months stand at 357 projects/64,174 rooms. Projects in the early planning stage reached an all-time high for the country at Q2 to stand at 654 projects/136,088 rooms. At the close of the second quarter, new construction starts and new project announcements in China increased YOY to stand at 160 projects/28,256 rooms and 236 projects/36,163 rooms, respectively.

Development activity at Q2 was most active within the mid-level chain scales, where upscale and upper midscale projects hit record-high project counts of 813 projects/192,891 rooms and 1,137 projects/182,478 rooms, respectively. Brand conversions and large scale renovations combined reached a new record-high, to close the quarter at 156 projects/28,633 rooms.

Chengdu continues to top the list of cities in China with the largest number of projects in the pipeline with 140 projects/27,890 rooms. Shanghai follows with 117 projects/22,887 rooms. Next is Guangzhou with 106 projects/21,869 rooms, Hangzhou with 92 projects/18,927 rooms, and Xi’an with 91 projects/16,603 rooms.

Franchise companies topping China’s construction pipeline are Hilton Worldwide with a record number of projects and rooms at 716 projects/127,106 rooms. Next is IHG Hotels & Resorts with 466 projects/97,468 rooms and Marriott International with 369 projects/95,665 rooms. Accor follows with all-time highs of 236 projects/39,367 rooms and then JinJiang Holding with 154 projects/15,355 rooms. These five companies make up an impressive 53% of projects and 55% of rooms in China’s total hotel construction pipeline.

Brands in China’s hotel construction pipeline are led by Hilton’s upper midscale Hampton by Hilton brands with 371 projects/53,446 rooms. Next is IHG’s Holiday Inn Express upper midscale brand with 184 projects/29,887 rooms, then upscale brand, Hilton Garden Inn, with record project and room counts of 112 projects/20,558 rooms.

China’s new hotel openings in the first half of the year were 258 new hotels/43,486 rooms. The LE forecast for new hotel openings anticipates another 591 new hotels/85,824 rooms to open in the second half of 2023, bringing expected new hotel openings to 849 hotels/129,310 rooms by year-end. The LE forecast for new hotel openings in China for 2024 expects 915 new hotels with 150,729 rooms to open. In 2025, LE analysts forecast new hotel openings in China to reach 901 new hotels/174,454 rooms.