Hospitality Design - December 2011 - 90

forecast
1.1 percent with supply rising 0.9 percent. “For 2013, we can expect the same type of growth and even better,” says Bobby Bowers, senior VP of Photo courtesy of John Potman & Associates STR.

Asian Invasion
Globally, according to Lodging Econometrics, there are 1.274 million Paciﬁc rooms has in the new Asia rooms, construction pipeline. 550,000

about 200,000 more than the U.S., and the driver is China at 397,000 rooms; in fact, the

A guestroom at the DoubleTree by Hilton Chongqing.

A rendering of the Gayatri Park Hyatt in Hyderabad, India.

country’s number of rooms under construction is almost greater than the entire U.S. pipeline. But, Ford warns, as the Chinese government begins to pull the plug a little bit on the rapid funding, there may be some topping off. “With our existing pipeline, we will have one hundred hotels open and in operation in China by the end of 2014,” says Wood. “Even with forecasts for somewhat moderate GDP growth in China, growth of six to nine percent annually is still, relatively speaking, very strong growth. Combined with the inevitable demographic trends relating to the emerging middle class, etc., the growth opportunity for the lodging sector in China remains very compelling, both for international visitation and domestic travel.” “If you look at the growth of our system in China and growth of the Chinese GDP, the lines essentially follow each other,” says Simon Turner, president, global development for Starwood Hotels & Resorts Worldwide. “At the end of this year, we will have a footprint of ninety hotels in China, and before the middle of next year we will celebrate having one hundred hotels, and it won’t be that much longer till we celebrate one hundred and ﬁfty hotels. A few years ago our hotels were built for non-Chinese travelers looking for a familiar outpost. Our hotels in China are now being built for the Chinese mid-market and luxury consumers.” Turner notes it will be interesting to see the continued growth in the secondary and tertiary markets as the central government encourages economic development in the interior of country in addition to the coasts. The place with arguably the most growth? Sanya, located on Hainan Island, which according to Lodging Econometrics, has 26 projects under construction accounting for more than 15,000 rooms. (Next in line is Shanghai with 63 projects under construction for 13,746 rooms.) Says Ford: “Every major luxury hotel brand is building a resort destination in Sanya. It will be the Miami of China; it is where they will go for sun and sand, it’s within the country, and they have a billion people who are becoming travel aware.” Says Turner, who opened a St. Regis there this month: “Hainan Island is the Hawaii of China. It’s the only tropical destination twelve months a year, and it’s obviously accessible to the Chinese without a visa.”

Let’s Get Global
The EMEA (Europe/Middle East/Africa) region, Ford says, is three years behind the U.S. “There will be pockets of opportunity, there will be hotels built, but it won’t be growing at the rate the U.S. construction pipeline will,” he says. “It’s not an easy outlook,” adds Konstanze Auernheimer, director of marketing and analysis, STR Global. “Beginning of the year I was pretty positive, and now I am like ‘Let’s wait and see.’” She did say that overall, 2011 was a good year for the region (of course with a few exceptions), with demand and occupancy on the rise. And she is hopeful for the UK where the leisure market, despite everything, wants to increase travel spend for next year. Another standout: Istanbul. According to STR Global, the city saw growth in ADR and RevPAR year-over-year in September, and its room supply is up almost six percent since 2010. This is all due to an economic stimulus by the Turkish economy. And it seems to be working: it was one of the top 10 destinations for conference events last year, and it is the third-fastest growing tourist destination in the world in terms of visitor numbers (up 30 percent) in 2010 according to a MasterCard Worldwide study, surpassing New York and Amsterdam. As for India, the hotel market hasn’t even scratched the potential surface. “It has emerged as a global economic powerhouse and also has the potential to become a major tourist destination in the world—twenty percent of Carlson’s global development pipeline is in India,” says Thorsten Kirschke, COO of Carlson Hotels, who expects to have more than 100 hotels in operation across the country by 2015. “The WTO (World Travel Organization) predicts that India will receive 25 million tourists by year 2015, which translates to an exponential growth of inbound travelers. The growing wealth of small and medium sized enterprises and emerging middle class will drive domestic and outbound travel upwards and provide an excellent opportunity for growth for Carlson. The World Travel & Tourism Council has reported that the ratio of hotel per one thousand people for India is 0.1, compared to Europe’s ﬁfteen and US’s ten.” Turner is ﬁnding that besides Westin, Starwood’s midscale Aloft brand fares especially well in India: “It’s a young, tech-savvy population that’s not restricted by the historical formality of hotel design. They like

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Table of Contents for the Digital Edition of Hospitality Design - December 2011