China's Hotel Construction Pipeline Hits Record High

The Macao Government Tourism Office projected 960,000 visitors for the 8 day Chinese New Year holiday period, a number we said was conservative. As of February 14th, in five days, Macau had received 898,665 tourists with the hotel occupancy rate reaching 97% for those days. It does not look like Macau will break the single day record of visitor arrivals, 226,326 on February 7, 2019 but the third day of this week’s holiday is now the second highest ever, with February 12, 2024 registering 217,448 tourists.

According to the latest China Construction pipeline Trend Report from Lodging Econometrics, China’s hotel construction pipeline ended 2023 with record-breaking project and room counts with 3,788 projects and 691,772 rooms. Here are the highlights:

China Construction Pipeline Overview

China Project Distribution by Segment

Top Cities by Project Count

Annual Hotel Openings Forecast

During the first four days of Chinese New Year, Hong Kong saw 750,000 visitors with 650,000 of them coming from Mainland China. This surpasses the 2018 figures which had 640,000 Mainland arrivals. For January 2024, there was 3.83 million arrivals, equivalent to 72% of the same period in 2018. The first 13 days of February had about 2 million visitors with the daily average at 83% of the whole February 2018.

Sihanoukville, Cambodia received nearly 300,000 tourists during the three-day Chinese New Year weekend. February 9-11 saw a 17.49% increase from last year to 294,301. Of that, 282,396 were national tourists with 11,905 of them considering international.

CoStar said Singapore hotels had a strong January, according to preliminary data. CoStar said Coldplay’s World of the Spheres Tour helped the results with occupancy at 72.8%, up 9.6% year over year. Average daily rate was up 3.3% to S$334.46 resulting in RevPAR of S$243.55, up 13.2% year over year. The highest daily occupancy levels were towards the end of the month, helped by the six Coldplay performances January 23-31. The highest occupancy levels of 91.3% were on January 25 and 26th. Taylor Swift will be there in March so those results may get topped. Forward STAR data shows occupancy on the books already as high as 72% on opening night.

Malaysians have opted for local holidays, rather than pay the global airfares and other rising costs of international travel. That free lunch will be over soon as hotel prices are expected to rise between 10% to 30% as the Sales and Services Tax will rise to 8% in March. It has been 6% but the Prime Minister said it will rise to 8%, excluding services such as food & beverage. Malaysia has some of the lowest hotel room rates in the Southeast Asian region. Even after the hike, rates should still be among the lowest but for the locals, it could make them think twice. The Malaysian Hotel Association said they will offset this with promotions and a push for more Chinese visitors with the visa-free entry scheme. The Malaysia Budget & Business Hotel Association is predicting room rates will soar by up to 50% due to the cascading effects of the new SST rate on the entire supply chain of the industry so we will see.

South Korea’s Shinsegae Engineering & Construction Co. announced it will sell its leisure unit to Josun Hotels & Resorts for US$136.6 million to manage risk by securing liquidity. The sale includes two golf resorts (Jayu Country Club and Trinity Club), three Aquafield water play areas in Starfield shopping malls and a landscaping business. The sale is expected to be completed by the end of April after they get approval from shareholders next month. Josun Hotels & Resorts currently operates nine hotels nationwide. The acquisition funds for the leisure business will be raised through the financial sector.

Hari Punja Group of Companies announced a 258 room, five star luxury hotel project at Wailoaloa Beach in Nadi in Fiji. The hotel will be managed by Rydges Australia. Construction of the $220 million project will begin in June of this year with the hotel scheduled to be opened in June 2026. Fiji is said to have a 4,000 to 5,000 hotel room deficit. Hari Punja said the project will also include sustainable tourism with the inclusion of eco-friendly products like solar-powered rooms and environmentally friendly products.

Macau’s Chief Executive said there are ongoing talks with the central government about a new proposal that would allow tour groups visiting Macau to stay in Hengqin. Hotels cost less there and Hengqin now has about 10,000 hotel rooms and a 24 hour checkpoint. This would help the group tour participants to enjoy sightseeing in Macau and return to Hengqin for their overnight stays. Peak periods such as the current Lunar New Year week, has seen room rates in Macau surge to between 3,000 and 4,000 patacas (US$370-$493).

A portfolio of 17 UK hotels, managed by Valor Hospitality Partners, has transitioned to ownership by ProsperCap Limited, a publicly held company on the Singapore Exchange. The hotels were previously owned by DTP Inter Holdings Corporation. That Thai-based company is a subsidiary of DTGO Corporation Limited which also holds a controlling stake in ProsperCap. DTGO acquired the portfolio of Hilton, Marriott and IHG franchised hotels in December 2019, partnering with Valor to manage the properties. Valor had been managing them for the former owner.