During the first half of the year, Canada’s tourism and hospitality sector saw an increasing number of domestic and international visitors comparable to those seen since the on-set of the pandemic.
As seen in the recently released Q2 2022 Canada Construction Pipeline Trend Report from Lodging Econometrics (LE), at the close of the quarter the total construction pipeline in Canada stands at 261 projects/35,662 rooms, up 3 per cent by projects year-over-year (YOY) and up 7 per cent by rooms YOY.
During the first half of the year, Canada’s tourism and hospitality sector saw an increasing number of domestic and international visitors comparable to those seen since the on-set of the pandemic. While larger group demand has been slow to return, smaller group, meetings, and leisure activity is on the upswing in urban areas and popular tourist destinations. As booking and occupancy numbers have increased in these markets, so has the interest of developers and investors.
Currently, there are 59 projects/7,657 rooms under construction in Canada. Projects scheduled to start construction in the next 12 months has the most substantial shift in projects YOY, showing a 32 per cent increase with 98 projects/13,707 rooms. Projects in the early planning stage are at 104 projects/14,298 rooms.
At Q2, the top provinces with the most projects in the pipeline are dominated by Ontario at 148 projects and a record-high of 20,539 rooms and accounts for 57 per cent of the projects in Canada’s total pipeline. Next is British Columbia with 42 projects/6,868 rooms and then Alberta with 23 projects/2,125 rooms. Together these three provinces account for 82 per cent of the rooms in Canada’s Pipeline.
The top five cities are led by Toronto with 64 projects/9,262 rooms, claiming 25 per cent of all projects in Canada’s total construction pipeline. Following distantly is Vancouver with record-high project and rooms counts of 18 projects/2,661 rooms, then Montreal with 14 projects/2,038 rooms, Niagara Falls with 12 projects/3,797 rooms, and Ottawa-Hull with 10 projects/1,693 rooms. These five cities account for 55 per cent of the rooms in the total pipeline.
The top franchise companies in Canada’s construction pipeline at Q2 are Marriott International leading with record-highs of 73 projects/10,096 rooms, followed by Hilton Worldwide with 64 projects/7,682 rooms, and InterContinental Hotels Group (IHG) with 42 projects/4,325 rooms. These three companies make up 69 per cent of the total projects in the pipeline. The largest brands in the pipeline for each of these companies are Hilton’s Hampton by Hilton with 26 projects/2,930 rooms, IHG’s Holiday Inn Express, with 20 projects/2,157 rooms, and Marriott’s Fairfield Inn with a record-high project count of 17 projects/1,613 rooms.
In the first half of the year, Canada had 10 new hotel openings accounting for 1,053 rooms. LE’s forecast for new hotel openings predicts another 24 new hotel openings in the second half of the year, for a total of 34 projects/4,103 rooms to open in 2022 for a supply growth rate of 1.2 per cent. In 2023, LE is forecasting 38 projects/4,182 rooms to open, for a supply growth rate of 1.2 per cent, and 2024 should see 43 projects/4,576 rooms open for a growth rate of 1.3 per cent.
The Ontario government has given the green light to Niagara Parks Commission (NPC) to redevelop the Toronto Power Generating Station (TPGS) into a five-star boutique hotel near the brink of Niagara Falls.
Mundi Hotel Enterprises Inc. has added a prominent property to its portfolio with the acquisition of the hotel component in Highline Metrotown, a mixed-use tower in Burnaby, British Columbia.
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As 2024 progresses, the Canadian hotel industry is navigating a shifting economic landscape characterized by inflation, fluctuating interest rates, and moderated demand growth. Cushman & Wakefield’s latest report,…
