LE: Canada's hotel construction pipeline slows

Analysts at Lodging Econometrics report that at the close of the first quarter of 2021, Canada’s hotel construction pipeline stood at 259 hotels and 35,432 rooms. The construction pipeline in Canada is down 15 percent by projects and 12 percent by rooms year over year. However, compared to prepandemic totals at the end of Q1 2019, Canada is down a mere 2 percent by projects and up 7 percent by rooms.

Canada’s lodging industry has been hard hit by the drop in leisure travel, largely due to stay-at-home orders and restrictions barring interprovincial travel. Currently, the country is experiencing a high level of positive cases and domestic and international travel remains limited.

However, as of May 5, more than 14 million vaccine doses have been administered to the country’s eligible population. More than 1 million Canadians are now fully vaccinated against COVID-19, having received both required doses of the country’s approved vaccines, and just over 13 million residents have received at least one dose. As vaccines continue to roll out and more of the population becomes fully vaccinated, it can be expected that case numbers across the country will lessen, and as that happens travel restrictions are likely to ease as well.

Projects under construction stand at 78 hotels with 9,887 rooms. Projects scheduled to start construction in the next 12 months are at 74 hotels and 8,312 rooms, while projects in the early planning stage hit a peak for the country in Q1 with 107 hotels and 17,233 rooms, up 4 percent by projects and 8 percent by rooms year over year. New project announcements surpassed the totals for each of the previous four quarters in 2020, to end Q1 2021 with 27 hotels and 4,628 rooms. Additionally, conversions reached a cyclical peak this quarter with 60 hotels and 6,768 rooms.

Top Markets, Top Brands

Ontario continues to lead Canada’s construction pipeline with 144 hotels and 19,399 rooms and accounts for 56 percent of the projects and 55 percent of the rooms in Canada’s total pipeline. British Columbia follows with 39 hotels and 5,738 rooms, then Quebec, at a record-high project and room count, with 28 hotels and 3,857 rooms, followed by Alberta with 23 hotels and 3,788 rooms.

The top city with the largest construction pipeline is Toronto with 59 projects and 8,145 rooms. Montreal follows distantly with 18 hotels and 2,750 rooms; then Niagara Falls with 13 hotels and 1,897 rooms, Vancouver with 12 hotels and 1,658 rooms, and Ottawa with nine hotels and 1,576 rooms. These five cities combined account for 43 percent of the projects and 45 percent of the rooms in Canada’s total pipeline.

The top franchise companies in Canada’s construction pipeline are Marriott International with 67 projects and 8,507 rooms, a record high project and room count for the company in this region, followed by Hilton with 63 hotels and 7,703 rooms and IHG Hotels & Resorts with 45 hotels and 4,362 rooms.

The top brands in Canada’s pipeline are IHG’s Holiday Inn Express with 26 hotels and 2,638 rooms, Hampton by Hilton with 25 hotels and 2,872 rooms, then Fairfield Inn by Marriott with 16 hotels and 1,623 rooms.