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Upscale Hotel Development Proliferates in China, Hits Record High in Q3 2024 – Image Credit Unsplash
China’s hotel construction pipeline reached an all-time high in Q3 2024, primarily driven by the upscale and upper midscale segments, according to the China Hotel Construction Pipeline Trend Report by Lodging Econometrics (LE). The total pipeline encompasses 3,853 projects with 703,312 rooms, marking a 4% increase in projects and a 3% increase in rooms compared to the previous year.
By the end of the quarter, 2,793 projects with 505,106 rooms were under construction, marking a cyclical peak and a 5% increase year-over-year (YOY). There were 348 projects with 60,095 rooms scheduled to start construction in the next 12 months, a slight 2% decline in projects and an 8% decline in rooms YOY. Early planning projects increased by 1% YOY, totaling 712 projects with 138,111 rooms.
The upscale and upper midscale sectors experienced significant growth this quarter. The upscale segment ended Q3 with 1,026 projects and 224,688 rooms, marking a 14% increase in projects and a 9% increase in rooms year over year. Meanwhile, the upper midscale segment saw a 7% increase in projects and a 4% increase in rooms year over year, totaling 1,230 projects and 188,280 rooms. These two segments account for 59% of all projects and rooms in China’s hotel construction pipeline.
China also witnessed a 12% YOY increase in brand conversion projects and a 20% increase in rooms, totaling 174 hotels and 29,893 rooms. Construction starts increased by 8% in projects and 10% in rooms YOY, ending the quarter with 241 projects and 39,138 rooms.
At the end of Q3, cities with the largest pipelines were Chengdu (152 projects/27,424 rooms), Shanghai (132 projects/25,081 rooms), Guangzhou (127 projects/25,763 rooms), Hangzhou (103 projects/20,356 rooms), and Xi’an (91 projects/16,303 rooms).
LE also reported that 662 new hotels with 91,463 rooms opened in China through Q3 2024. It is forecasted that 326 additional hotels with 53,654 rooms will open in Q4, bringing the total to 988 new hotels with 145,117 rooms by the end of 2024. In 2025, 1,101 new hotels with 176,140 rooms are expected to open, followed by another 799 new hotels with 150,069 rooms in 2026.
