London and Paris attract almost 30 percent of all hotel investment globally, but Middle Eastern cities Beijing, Shanghai, Bangkok and Dubai are the dynamically emerging markets with potential for growth in the hotel sector, according to a JLL’s report The Changing Global Landscape of Hospitality.
However, whilst they’re starting to rival cities from Europe and United States in terms of size and prestige, they’re not quite yet on the same level when it comes to investment.
These cities are being dubbed the ‘rising giants’ of the hotel industry. “They’re a distinct group of highly dynamic hotel markets that are quickly gaining global scale,” says Lauro Ferroni, Global Head of Hotels and Hospitality Research at JLL.
According to JLL’s report, Shanghai is already one of the largest hotel markets in the world, attracting US$1.3 billion in hotel transaction volumes between 2014 and 2016. Beijing attracted more than US$1 billion in investment over the last three years, putting it among the global top 20. These two cities have become the second and third largest markets in terms of number of rooms, behind only Las Vegas. However, there is still work to be done: Beijing’s momentum has slowed due to lower government demand and lower levels of new development.
JLL’s report has also identified potential in global tourism and business hub Dubai. The city has a large supply pipeline, with a number of big-name hotel brands seeking a foothold in the city.
According to MasterCard’s latest Global Destination Cities Index, China’s Bangkok is the world’s most popular overnight visitor destination. The hotel sector there has staged a strong recovery – however recent restrictions to legislation have increased barriers for future hotels development in the city.
“Shanghai, Beijing, Dubai, Bangkok - these are successful global cities with huge growth potential and which are now establishing themselves as a target for investors. As they continue to grow and increase their visibility on the world stage, these cities could reshape the global hotel landscape,” concluded Ferroni.
Read JLL’s report to find out more.