At the close of the second quarter, analysts at Lodging Econometrics report that the total construction pipeline in Canada stands at 253 hotels with 33,240 rooms, down 43 projects or 15 percent by hotels year over year.
While several pandemic waves have slowed Canada's economic growth in the first half of 2021, the country’s finance department predicts the economy will pick up in the third quarter. As more Canadians become fully vaccinated, more regions have reopened or are considering reopening. About two-thirds of Canadians are fully or partially vaccinated. As restrictions continue easing, pent-up consumer demand will help to establish some semblance of normalcy. Travel and the hospitality sector are expected to benefit as well.
Projects under construction stand at 71 hotels with 9,218 rooms, down 28 percent by hotels and 25 percent by rooms year over year. Projects scheduled to start construction in the next 12 months are at 74 hotels with 8,645 rooms. Early planning has the most substantial shift in hotels year over year, reaching a cyclical peak project count number and showing a 19 percent increase by projects to end the second quarter with 108 total hotels and 15,377 rooms. This increase in early planning is typical following an economic slowdown as developers are eager to move from the drawing board into the permitting phase, according to LE.
In the first half of 2021, Canada had 19 new hotel openings. LE’s forecast for new hotel openings predicts another 29 new openings in the second half of the year, for a total of 48 hotels with 5,033 rooms to open in 2021 for a supply growth rate of 1.4 percent. In 2022, LE is forecasting 43 projects with 5,344 rooms open, for a supply growth rate of 1.5 percent. Finally, 2023 will have 54 projects with 6,490 rooms open for a growth rate of 1.8 percent, according to LE. The 2021 forecast for new hotel openings has Montreal leading with seven projects and 1,000 rooms opening. In 2022 and 2023, Toronto is forecast to top the list with eight projects and 1,182 rooms and 15 hotels with 2,148 rooms opening, respectively.