LE: Canada hotel pipeline poised for growth

According to the year-end Lodging Econometrics Construction Pipeline Trend Report for Canada, the country ended 2023 at 294 hotels and 38,396 rooms, a mere 11 projects short of the country’s peak of 305 projects achieved in Q4 2019. Canada’s pipeline is up 10 percent by projects and 7 percent by rooms year over year.

At the close of 2023, there are 66 hotels and 8,998 rooms under construction, up 27 percent by projects and 36 percent by rooms year over year. Projects scheduled to start construction within the next 12 months are at 85 hotels and 9,810 rooms, while those in early planning are at 143 hotels and 19,588 rooms, up 12 percent by projects and 15 percent by rooms year over year.

New project announcements in the country were at their highest at Q4 2023 since Q3 2021, with 37 hotels and 4,191 rooms, up 35 percent by projects and 26 percent by rooms. LE analysts expect Canada’s hotel construction pipeline to remain strong and continue to expand through 2024 as construction starts in the country increased 44 percent year over year by projects and 49 percent by rooms at the close of Q4. Upper midscale projects account for nearly 50 percent of the projects in the total pipeline at Q4 with record-high counts of 132 projects and 13,860 rooms. Upper upscale projects in Canada also reached record-high project and room counts, with 20 hotels and 4,606 rooms at the end of 2023.

Top Markets

Accounting for 59 percent of the projects and 60 percent of the rooms in Canada’s total pipeline, the province of Ontario continues to lead with the largest number of projects in the pipeline at Q4 with all-time high counts of 173 hotels and 23,112 rooms. British Columbia follows with 54 hotels and 7,893 rooms, then the province of Quebec with 22 hotels and 2,674 rooms, and the province of Alberta with 17 hotels and 1,774 rooms.

Cities in Canada with the most projects in the pipeline continue to be led by Toronto with a record 65 hotels and 9,391 rooms. Distantly following are Vancouver with record high totals of 23 hotels and 4,317 rooms, then Montreal with 16 hotels and 2,123 rooms, and Niagara Falls with 11 hotels and 3,999 rooms.

Canada had 25 new hotels with 3,278 rooms open in 2023. In 2024, LE forecasts that 29 new hotels with 3,698 rooms will open. LE is forecasting a slight increase in Canada’s growth rate from 0.9 percent at the end of 2023 to 1 percent in 2024 and again in 2025 to 1.1 percent with 40 new hotels and 4,013 rooms expected to open by year-end.