According to the October 2010 STR Global Construction Pipeline Report released this week, many markets are showing slight growth in new hotel development. Even with a weak global economy over the last year, certain markets like Brazil and Asia are accelerating construction of new hotels.
Middle East/Africa Markets
The Middle East/Africa hotel development pipeline comprises 443 hotels totaling 121,218 rooms.
"The pipeline across the region has held steady compared to last month", said Elizabeth Randall, managing director of STR Global. "However, we see fewer hotels in the 'recently opened' phase because of the downturn last year and the slower revenue per available room recovery in the region. The United Arab Emirates, driven primarily by Abu Dhabi and Dubai, continued to dominate the number of projects in the total active pipeline among countries in the region".
Among the Chain Scale segments, the Upper Upscale segment accounted for the largest portion of the total active pipeline with 28.7 percent and 34,805 rooms. Three other segments each made up more than 10 percent of rooms in the total active pipeline: the Unaffiliated segment (25.2 percent with 30,605 rooms); the Luxury segment (19.9 percent with 24,106 rooms); and the Upscale segment (13.8 percent with 16,679 rooms). The Midscale without Food and Beverage segment accounted for the smallest portion of the total active pipeline with 0.7 percent and 799 rooms.
Middle East/Africa pipeline by Chain Scale segment for October 2010 (number of rooms):
Europe's hotel development pipeline comprises 711 hotels totaling 122,301 rooms. The region reported 328 projects in the In Construction phase totaling 59,782 rooms.
"The European pipeline remained relatively steady with just over 700 projects in October", said Elizabeth Randall, managing director of STR Global. "Interestingly, this month, the top four cities with the most developments are London, Moscow, Vienna and Berlin, which reflects partly the top three countries for hotel development: United Kingdom, Germany and Russia. The Austrian capital changed places with Berlin as London, Moscow and Vienna saw new projects entering the pipeline. It will be interesting to see how the European pipeline develops over the next few months. Revenue per available room recovery is expected to continue within a still risky economic environment and access to finance is still an issue for developers in some cases".
Year-to-date in 2010, 215 projects have opened in Europe with 33,226 rooms. There are 72 projects with 10,250 rooms in the region still expected to open in 2010. Looking ahead, in 2011 the region is expecting 298 projects with 52,601 rooms to open and in 2012 there are an expected 206 projects with 38,018 rooms.
The Central/South America hotel development pipeline comprises 139 hotels totaling 21,966 rooms
"While Brazil takes the lead with the most hotel projects in a country across Central and South America, it is Panama City, Panama, that dominates on a city level in the development pipeline", said Elizabeth Randall, managing director at STR Global. "The city benefits from a stronger recovery in Panama and a positive economic outlook due to the expansion of the Panama Canal. Panama City has 21 hotels in the pipeline, followed by Buenos Aires with six hotels and five hotels in the Brazilian markets of Rio de Janeiro and Sao Paulo".
Among the markets in the region, Panama City reported the most rooms in the In Construction phase with 2,468 rooms. Other markets that reported a significant number of rooms in the In Construction phase for the month include: Buenos Aires, Argentina (560 rooms); Lima, Peru (542 rooms); Bogota, Colombia (385 rooms); and Sao Paulo, Brazil (364 rooms).
The Caribbean/Mexico hotel development pipeline comprises 138 hotels totaling 18,723 rooms.
Among the countries in the region, Mexico reported the largest number of rooms in the In Construction phase with 5,018 rooms. The Dominican Republic followed with 1,522 rooms, and Puerto Rico had 1,065 rooms. St. Lucia (245 rooms) and Turks and Caicos (220 rooms) were also among the top five countries with the most rooms in the In Construction phase.
The Asia/Pacific hotel development pipeline comprises 1,084 hotels totaling 265,251 rooms.
"With a strong recovery in revenue per available room across Asia/Pacific, the region's pipeline has picked up and now holds 1,084 hotels projects", said Elizabeth Randall, managing director of STR Global. "We expect that in light of the current market and economic conditions, this trend will continue and the region will see further pipeline growth during coming months".
Among the markets in the region, New Delhi, India, ended the month with 7,558 rooms in the total active pipeline, reporting the largest expected growth if all active rooms open. New Delhi's existing room supply is 19,034 rooms. Four other markets reported large expected growth: Mumbai, India (5,391 rooms in the total active pipeline and 23 percent expected growth); Manila, Philippines (4,962 rooms with 22 percent expected growth); Bangkok, Thailand (8,526 rooms with 13 percent expected growth); and Kuala Lumpur, Malaysia (4,110 rooms with 12 percent expected growth).