PORTSMOUTH, N.H. — In the third quarter of 2021, Lodging Econometrics (LE) reported that Canada’s hotel construction pipeline stands at 257 projects/34,167 rooms in the third quarter of 2021. Pipeline projects declined slightly, down seven per cent by projects and five per cent by rooms, year-over-year (YOY).
Currently, projects under construction stand at 70 projects/9,039 rooms, down 20 per cent by projects and 12 per cent by rooms YOY. In the next 12 months, 85 projects/10,449 rooms are scheduled to start construction, dropping 17 per cent by projects and 13 per cent by rooms YOY. Projects in the early planning stage show an increase in Q3, with 102 projects/14,679 room, up 17 per cent by projects and nine per cent by rooms YOY.
According to a recent statement, the Bank of Canada anticipates increased inflation rates through the end of the year, averaging just under five per cent. In 2023, inflation rates are expected to revert back to its original target of two per cent. Despite this increase, developers continue to push projects into the permitting and early planning stage.
In terms of provinces, Ontario is the most active for pipeline projects with 152 projects/18,787 rooms, accounting for 59 per cent of the projects in Canada’s total pipeline. British Columbia is next with 32 projects/5,050 rooms, followed by Alberta, standing at 23 projects/3,691 rooms. Together, these provinces account for 81 per cent of the rooms in Canada’s hotel pipeline.
Additionally, the Toronto market currently has a record-high number of projects in the pipeline, standing at 65 projects/9,123 rooms. Following behind are Montreal with 14 projects/2,090 rooms and Niagara Falls with 12 projects/1,885 rooms. Collectively, these cities account for 35 per cent of the rooms in the total pipeline.
The top franchise companies in Canada are Marriott International with 68 projects/8,460 rooms, followed by Hilton Worldwide with 66 projects/7,660 rooms and InterContinental Hotel Group (IHG) with 43 projects/4,357 rooms. Together, these companies make up 69 per cent of projects in Canada’s pipeline. Top brands include Hampton by Hilton, IHG’s Holiday Inn Express and Home2 Suites by Hilton.
Combined renovations and conversions reached a high this quarter, closing at 84 projects/10,538 rooms. Before the end of the year, 15 new hotels/1,583 rooms are scheduled to open, and in 2022, LE forecasts Canada to open 43 new hotels/5,176 rooms.
