China’s Hospitality Sector Bounces Back

With 1,260 hospitality projects in the pipeline in 1Q11, China is driving hotel development activity in the Asia-Pacific region to levels last seen in 2Q08. According to a spring 2011 Lodging Econometrics report, China’s pipeline was the first to surpass its previous cyclical peak, with projects and rooms increasing 2 percent and 9 percent respectively since 2Q08. Overall, the Asia-Pacific region is 9 percent off peak project numbers and 1 percent off peak room numbers.

China’s strong growth was fueled by the government's expansion of credit in response to the global recession. Beneficiaries such as local governments, state-owned enterprises, and major property developers helped to rejuvenate the economy and, in turn, spur lodging development. The report forecasts continued growth through 2012, though the Central Bank already has moved to moderate growth and slow inflation.

Other report highlights:

• China trails only the U.S. in the number of hospitality projects in the pipeline, but both countries have virtually the same number of rooms in the pipeline.
• Last year was the first time China saw more new hotel openings than the U.S.
• With 412 projects and 75,112 rooms, India's pipeline is the second largest in the region and third largest in the world.
• Vietnam has the third largest pipeline in the Asia-Pacific region.