South-east Asia Hotel Development Shifts to Conversions, Say IHG, Centara, Horwath HTL
Hotel conversions are claiming a greater share of South-east Asia's development pipeline, driven by high debt costs and extended construction timelines. Industry executives and data from Horwath HTL show owners are favouring faster, more cost-effective transformations of existing assets over new builds.
Capital Pivot Towards Conversions
South-east Asia's hotel development landscape is undergoing a significant shift, with conversions of existing properties gaining prominence over new construction, according to a report by TTG Asia published on July 23, 2026. This trend is largely attributed to elevated borrowing costs and prolonged build periods, which make ground-up development less attractive. Horwath HTL's data indicates that conversions are concentrating in more developed markets within the region. Executives from major hotel groups, including IHG Hotels & Resorts, Radisson Hotel Group, Centara Hotels & Resorts, and Accor, consistently rank conversions as a top development trend.
Operator Perspectives and Market Data
Bryan Chan, IHG Hotels & Resorts' vice president of development for South East Asia and Korea, noted that conversions comprised approximately 30 per cent of IHG's openings in 2019, rising to 50 per cent in 2025. This shows a change in owner priorities towards assets with minimal downtime and lower costs. Centara Hotels & Resorts' chief development officer, Andrew Shaw, confirmed that conversions now take precedence over new builds, citing high debt and construction expenses. Matt Gebbie, Horwath HTL's director for Pacific Asia, observed that new builds in secondary cities, while still dominant, decreased from 80 per cent in 2019 to around 60 per cent in 2025 and Q1 2026, with conversions steadily taking a larger share.
Geographic Disparities in Development
The movement towards conversions is not uniform across Asia-Pacific, Horwath HTL data reveals. Developed markets such as Australia, Malaysia, New Zealand, and Thailand show a higher proportion of conversions, with new builds accounting for 52 per cent, 52 per cent, 50 per cent, and 55 per cent of activity respectively across 2019-2026. In contrast, earlier-stage growth markets like Pakistan (92 per cent new build), Cambodia (81 per cent), the Philippines (78 per cent), South Korea (76 per cent), and Vietnam (73 per cent) continue to see new builds dominate. For 2024-2026, Australia's new build share fell to 34 per cent, with conversions comprising 56 per cent of deals.
Implications for Hospitality and Investment
This shift means owners and investors are increasingly focused on optimising existing assets for performance rather than initiating lengthy new construction projects. Armand Steinmeyer, Radisson Hotel Group's vice president of development for South-east Asia, highlighted a dual focus on greenfield versus existing properties, with the latter concentrating on adapting to demand. For the industry, this drives growth in collection and soft brands, which absorb conversion deals by offering global distribution access under franchise and performance-linked fee structures. Travellers may observe a greater number of branded hotels emerging from renovated independent properties or repurposed non-hotel real estate, particularly in premium segments.
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