According to Lodging Econometrics' "Q2 2022 Canada Construction Pipeline Trend Report," at the close of the quarter the total construction pipeline in Canada stands at 261 hotels and 35,662 rooms, up 3 percent by projects year over year and up 7 percent by rooms year over year.
During the first half of the year, Canada’s tourism and hospitality sector saw an increasing number of domestic and international visitors. 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 hotels and 7,657 rooms under construction in Canada. Projects scheduled to start construction in the next 12 months has the most substantial shift in projects year over year, showing a 32 percent increase with 98 hotels and 13,707 rooms. Projects in the early planning stage are at 104 hotels and 14,298 rooms.
Top Markets
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 percent of the projects in Canada’s total pipeline. Next is British Columbia with 42 hotels and 6,868 rooms and then Alberta with 23 hotels and 2,125 rooms. Together these three provinces account for 82 percent of the rooms in Canada’s pipeline.
The top five cities are led by Toronto with 64 hotels and 9,262 rooms, claiming 25 percent of all projects in Canada’s total construction pipeline. Following distantly is Vancouver with record-high project and rooms counts of 18 hotels and 2,661 rooms, then Montreal with 14 hotels and 2,038 rooms, Niagara Falls with 12 hotels and 3,797 rooms, and Ottawa-Hull with 10 hotels and 1,693 rooms. These five cities account for 55 percent of the rooms in the total pipeline.
Top Companies, Top Brands
The top franchise companies in Canada’s construction pipeline at Q2 are Marriott International leading with record highs of 73 hotels and 10,096 rooms, followed by Hilton with 64 hotels and 7,682 rooms, and IHG Hotels & Resorts with 42 hotels and 4,325 rooms. These three companies make up 69 percent 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 hotels and 2,930 rooms, IHG’s Holiday Inn Express, with 20 hotels and 2,157 rooms, and Marriott’s Fairfield Inn with a record-high project count of 17 hotels and 1,613 rooms.
Looking Ahead
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 hotels and 4,103 rooms to open in 2022 for a supply growth rate of 1.2 percent. In 2023, LE is forecasting 38 hotels and 4,182 rooms to open, for a supply growth rate of 1.2 percent, and 2024 should see 43 hotels and 4,576 rooms open for a growth rate of 1.3 percent.