As of the end of Q3 2021, Canada’s hotel construction pipeline stands at 257 hotels and 34,167 rooms, according to the latest data from Lodging Econometrics. The number of projects in the pipeline declined slightly at the close of the quarter, down 7 percent by projects and 5 percent by rooms year over year.
Projects under construction stand at 70 hotels and 9,039 rooms, down 20 percent by projects and 12 percent by rooms year over year. Projects scheduled to start construction in the next 12 months stand at 85 hotels and 10,449 rooms, down 17 percent by projects and 13 percent by rooms year over year. Projects in the early planning stage show an increase in Q3, with 102 hotels and 14,679 rooms, up 17 percent by projects and 9 percent by rooms year over year.
A recent statement from the Bank of Canada forecasts increased inflation rates through the end of the year, averaging around 4.75 percent. In 2022, it is forecasted to be around 3.4 percent before reverting back to its original target of 2 percent by 2023. Even with this increase, developers are optimistic and continue to push projects from the drawing board into the permitting and early planning stage, according to Lodging Econometrics.
Top Markets
Ontario is the most active province for pipeline projects in Canada, standing at 152 hotels and 18,787 rooms and accounting for 59 percent of the projects in Canada’s total pipeline. Next is British Columbia, with 32 hotels and 5,050 rooms, and then Alberta, with 23 hotels and 3,691 rooms. Together, these three provinces account for 81 percent of the rooms in Canada’s hotel pipeline.
The market with the most projects in the pipeline is Toronto with 65 hotels and 9,123 rooms, at a record high and claiming 27 percent of all the rooms in Canada’s construction pipeline. Following distantly are Montreal with 14 hotels and 2,090 rooms and Niagara Falls with 12 hotels and 1,885 rooms. These three cities combined account for 35 percent of the rooms in the total pipeline.
Top Companies
The top franchise companies in Canada's construction pipeline are Marriott International, at an all-time high project count, with 68 hotels and 8,460 rooms, followed closely by Hilton with a record 66 hotels and 7,660 rooms and then IHG Hotels & Resorts with 43 hotels and 4,357 rooms. These three companies make up 69 percent of projects in the country’s total construction pipeline.
The top brands in the country’s pipeline at Q3 close are Hampton by Hilton with 28 hotels and 3,137 rooms and reaching a cyclical peak, IHG’s Holiday Inn Express with 23 hotels and 2,413 rooms, and Home2 Suites by Hilton with record highs of 16 hotels and 1,703 rooms. Other notable brands in Canada’s pipeline are Marriott’s TownePlace Suites with a peak project count of 16 projects, accounting for 1,688 rooms, as well as Marriott’s Fairfield Inn with 15 hotels and 1,428 rooms.
Renovations
At the end of Q3 2021, renovation totals stand at 16 hotels and 3,080 rooms and conversions hit peak counts, both by projects and rooms, ending the quarter at 68 hotels and 7,458 rooms. Combined, renovations and conversions reached a cyclical high and closed the quarter at 84 hotels and 10,538 rooms.
Finally, through the third quarter, Canada opened 28 new hotels and 2,914 rooms with an additional 15 new hotels with 1,583 rooms scheduled to open before year-end. In 2022, LE forecasts Canada to open 43 new hotels with 5,176 rooms.