APAC Hotel Construction Pipeline Rises 7% Year-Over-Year

As seen in the Q1 2024 Hotel Construction Pipeline Trend Report from Lodging Econometrics, the total pipeline in the Asia Pacific region, excluding China, (APEC) reached a total of 2,021 projects/402,312 rooms, representing a 7% year-over-year increase in projects and a 2% YOY increase in rooms. At the close of the first quarter, there are 866 projects/198,267 rooms under construction in the region. Additionally, there are 340 projects/65,259 rooms scheduled to start construction in the next 12 months. The early planning stage also saw growth with a record 815 projects totaling 138,786 rooms.

Standout chain scale segment in the APEC region at the Q1 close include the upscale chain scale with 483 projects/97,013 rooms, upper upscale with 376 projects/83,028 rooms, and the luxury chain scale with 267 projects/52,346 rooms. The top three countries in the APEC region by project count at Q1 are India with 581 projects/70,178 rooms, Vietnam with 238 projects/85,085 rooms, and Indonesia with 185 projects/31,743 rooms. APEC cities with the largest pipelines by project count are led by Bangkok, Thailand with 67 projects/15,525 rooms; Jakarta, Indonesia with 46 projects/9,476 rooms; and Melbourne, Australia with 43 projects/8,121 rooms. Phuket, Thailand follows with 37 projects/9,320 rooms; and Kuala Lumpur, Malaysia with 32 projects/9,191 rooms. During the first quarter, 72 new hotels comprising 13,714 rooms opened in the APEC region, with an additional 311 new hotels/60,140 rooms forecast to open in Q2-Q4. LE is forecasting a total of 383 new hotels and 73,854 rooms to open by year-end. Looking ahead to 2025, LE analysts anticipate 365 new hotels and 73,074 rooms to open throughout the APEC region.

Domestic Chinese travelers spent 166.9 billion yuan during the Labour Day Holiday period but the South China Morning Post said hotel chains across the mainland continued to face economic headwinds as budget-conscious visitors turned towards lesser-known resorts to avoid crowds and escalating competition in the hospitality industry kept prices from rising. Nationwide RevPAR was said to be down -5.1% on a weekly basis the last week of April with occupancy down -4.3 percentage points to 58.8%. The article discussed how high chain resort/hotel prices jumped the first week of May, prompting many in the article to talk about staying in home grown, no brand, or Airbnb-type properties.

The Chinese government has announced the inclusion of eight mainland cities into the facilitated individual travel scheme for visits to Hong Kong and Macau with the new measures to take effect on May 27th. The additional cities include Taiyuan in Shanxi Province, Hohhot in Inner Mongolia Autonomous Region, Harbin in Heilongjiang Province, Lhasa in Tibet Autonomous Region, Lanzhou in Gansu Province, Xining in Qinghai Province, Yinchuan in Ningxia Hui Autonomous Region and Urumqi in Xinjiang Uygur Autonomous Region.

During Songkran in Thailand in April, Thai hotel room rates surged by 33% to THB 5,421 per day, according to SiteMinder. Between April 11-18, that average rate of US$148 was up from rates the week before averaging US$135. SiteMinder said travelers booked more in advance this year as the average lead time extended to 42 days, up from 27 days last year. Domestic travelers also reached their highest levels since October of 2023, accounting for 23% of the total check ins. In January and February of this year, they accounted for 13%. International travelers staying at SiteMinder Thai properties during Songkran mostly came from the UK, Germany, Indonesia, France and Australia, in that order.

Sega Sammy Holdings is set to sell its Phoenix Seagaia Resort in Japan to US-based Fortress Investment Group, redirecting its focus towards the gaming industry. The deal involves Fortress purchasing all shares in the operating company Phoenix Resort, with Sega Sammy acquiring 20% of voting rights through newly issued shares. Fortress has around 30,000 hotel rooms in Japan and recently acquired Hotel New Akao in Atami. Sega Sammy initially acquired Phoenix Resort in Miyazaki, southwestern Japan in 2012 from Ripplewood. The resort’s overnight guests rose by 30% in the year ending March 2023.

South Korea‘s Taeyoung Group is considering selling a four-star hotel and relevant facilities in the Greater Seoul area for more than 100 billion won (US$72.9 million to a local real estate firm. Seoul-based Starlord Investment Management was selected as the preferred bidder for Take Hotel. The hotel has 27 floors above ground one underground with 228 guest rooms and internal facilities including a swimming pool, fitness center, restaurants and conference rooms. Taeyoung Group is undergoing a debt workout of its construction unit.

IHG Hotels & Resorts will introduce two luxury and lifestyle brands in Vietnam this year as part of their expansion strategy. The Hotel Indigo and Vignette Collection will mark their debut in the markets of Ho Chi Minh City and Hoi An respectively. Hotel Indigo will open its doors in Ho Chi Minh City with the new Hotel Indigo Saigon The City. The Vignette Collection will premier near the renowned UNESCO World Heritage Site in Hoi An. This will grow IHG’s Vietnam estate to eight brands. IHG said they are expanding their presence in Vietnam with new projects including the InterContinental Halong Bay Resort and Holiday Inn Resort Halong Bay, slated to open in the upcoming years. Plans are also underway for an InterContinental Resort in Thanh Xuan Valley, Vinh Phu which will be IHG’s first valley resort in the country. IHG has 18 hotels operating and 26 in the pipeline.

Mumbai, India-based property developer Phoenix Mills is looking to build more hotels to strengthen its hospitality portfolio. The company currently runs a St. Regis property in the Lower Parel area of Mumbai and the Courtyard by Marriott in Agra. The company is building a 400-key premium hotel at the mixed-use project Marketcity in Bengaluru. It has tied up with Hyatt International to manage the hotel under the Grand Hyatt brand with the hotel expected to be completed by FY28 at a cost of 600 crore. Phoenix Mills recently bought an 11-acre parcel of land in Thane near Mumbai with the project likely to have another premium hotel with 600 keys at a cost of nearly 800 crore. Phoenix Mills is focusing on hotels as they have no plans to open new malls in this and the next financial year.

The Sofitel Philippine Plaza Manila is shutting down by the end of next month. The hotel staff were informed the hotel will close on June 30th. The hotel has 17 years left on its lease contract with the Government Service Insurance System. Last year both owner Philippine Plaza Holdings Inc. and the manager Accor confirmed the hotel is in the pipeline for a major renovation. In June 2023 the Sofitel added two more lots adjacent to the main building up an expanded lease contract under GSIS. The media reported the hotel is expected to be closed for up to 18 months for major renovations.

Mandarin Oriental is set to reopen in Makati City, Philippines, in 2026. The hotel is being developed by AyalaLand and will make its comeback at the Ayala Triangle Gardens, a prime address in the Makatai Central Business District. The hotel will have 276 rooms and an array of amenities, from top-tier dining options to its renowned spa experience. It will be in two adjacent towers set to reshape the Makati Skyline. The old Mandarin Oriental closed in 2014 after 38 years of operation.

Hotel and Lodging Performance

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