Asia/Pacific Hotel Pipeline Hits Record Levels, But Will Slow

The Asia/Pacific region should see 828 new hotels with 134,673 rooms open this year, with an additional 1,304 hotels with 311,203 rooms to open in the following two years, according to a pipeline report for the region that research firm Lodging Econometrics released today.

After the first half of this year, Asia/Pacific had a record 2,226 projects in the works and 60 percent of those already are under construction, according to the report. That activity made the region the second largest in hotel development, following the United States, with 5,883 projects in its pipeline. More than half of the Asia/Pacific projects are in China, and 13 of the top 20 markets in the region in terms of hotel pipeline size are in China. More than three-quarters of what's in the pipeline in China already is under construction, so openings in the country should be at a robust pace through 2010, according to the report.

An additional five of the top 20 markets with the biggest hotel pipelines are in India. However, 44 percent of India's pipeline—now at 470 projects, or 76,304 rooms—is in the early planning stages, and only a little more than one-third is under construction. As such, even if the projects are successful in getting financing, supply growth in the country will not have a major impact until 2010 or later, according to the report.

The two Asia/Pacific markets outside of China and India with the biggest pipelines were Bangkok and Jakarta.

Looking further ahead, Lodging Econometrics has forecast that the Asia/Pacific pipeline will contract in coming years. The pace at which projects are moving from planning to construction is slowing, construction starts are down 45 percent compared with the end of 2007 and new project announcements are down 68 percent from that period, the report indicates.