Record-High Counts in China’s Hotel Construction Pipeline; Upscale and Upper Midscale Chain Scales also Reach Peak Totals in Q3

In the Q3 2023 China Construction Pipeline Trend Report by Lodging Econometrics (LE), at the end of the quarter, China’s total construction pipeline reached a record high of 3,720 projects with 686,017 rooms, up 3% by projects and unchanged by rooms year-over-year (YOY). The record-high projects in the total pipeline can be attributed to the number of upscale and upper midscale chain scale projects, which both hit project and room count peaks this quarter. The upscale chain scale ended Q3 with a total of 850 projects/198,277 rooms, and the upper midscale chain scale has 1,222 projects/194,515 rooms. Combined, these two chain scales account for 53% of projects and 55% of the rooms in China’s hotel construction pipeline.

At the close of the third quarter, there are 2,661 projects/480,538 under construction, up 5% by projects YOY. Projects scheduled to start construction in the next 12 months stand at 356 projects/65,606 rooms. Projects in early planning are up 9% YOY, reaching a record 703 projects with 139,873 rooms.

Brand conversions also reached record high project and room counts in Q3. Conversion totals in China increased 44% YOY by projects and 36% YOY by rooms, with 156 hotels/24,885 rooms. Construction starts and new project announcements (NPAs) each grew substantially YOY, standing at 205 projects/35,455 rooms and 310 projects/49,874 rooms, respectively.

Through the third quarter of 2023, 468 new hotels, accounting for 75,491 rooms, have opened in China. The LE forecast for new hotel openings expects another 310 hotels with 44,313 rooms to open in the fourth quarter, bringing the forecasted new hotel openings to 778 new hotels with 119,804 rooms by year-end.

The LE forecast for new hotel openings for 2024 expects 983 new hotels with 156,814 rooms to open by year-end. In 2025, the forecast is for 899 new hotel openings with 169,363 rooms.

Record-high Project Counts in Chengdu at the Q3 Close

Cities in China with the largest pipelines, at the Q3 close, are Chengdu, with a record-high 144 projects/29,207 rooms; Shanghai, with 121 projects/23,222 rooms; Guangzhou, with 108 projects/22,686 rooms; Hangzhou, with 90 projects/18,917 rooms; and Wuhan, with 90 projects/12,540 rooms.