HENDERSONVILLE, Tennessee—The conversation about new supply is in full swing, as developers and brands look to capitalize on the continued upswing in the global economy and the strong forecast of international travel.
Here, STR looks at the global pipeline in construction room counts at the end of 2018 to highlight where hotel development is (and is not) taking place. (STR is the parent company of Hotel News Now.)
Not surprisingly, the Chinese hotel economy is growing rapidly, with more than 200,000 rooms in construction as of the end of 2018. Worth noting is the fact that more than 104,000 of these rooms are in the upscale and upper-midscale chain scale. As in other European countries and the U.S., the majority of development takes place in the limited-service area.
The U.S. room count has not changed much throughout 2018 and only rose slightly near the end of the year, driven up by the JW Marriott and Edition in Las Vegas, Marriott’s first real foray onto the strip.
The United Arab Emirates shows 196 projects in construction, the largest being the 900-room The Cote D’Azur Hotel. Saudi Arabia still is home to the largest hotel construction in the world, the Abraj Kudai in Makkah with a reported 10,000 rooms, which after some stops and starts now is poised to open in 2020. Germany has 318 projects under way, two of them (Motel One Nuremberg-City and Scandic Frankfurt Hafenpark) with more than 500 rooms.
Portugal developers broke ground on plenty of hotels in 2018. Currently 30 hotels are being built in the country, the largest being the 450-room Pestana Quinta da Amoreira. It is also worth noting that 16 of the projects are in Lisbon. In Sierra Leona, two hotels, the Hilton and the Noom Freeport, make up the full pipeline. In Romania, all seven projects are major branded hotels, with 773 rooms being built in Bucharest. The Japanese pipeline is noteworthy for the APA brand, which leads the count with 13 projects and 7,700 rooms.
Smaller countries by definitions have smaller pipelines, and it is heartening to see the success of the openings in somewhat smaller markets. It is worth mentioning that the four projects that opened were all affiliated with a major brand, which likely aided in their successful go-to-market strategy.
Taking the prior table as a guide, it will be interesting to note how many of the properties currently being built actually make it to the end of construction. It is likely that the properties associated with a major brand will have a higher rate of success. We will keep track of these and other projects as they come to fruition in 2019 and beyond.
Jan Freitag is the SVP of lodging insights at STR.
This article represents an interpretation of data collected by STR, parent company of HNN. Please feel free to comment or contact an editor with any questions or concerns.