Sometimes a series of factors converge to create a favourable outcome — a reality hoteliers are discovering as they continue to experience halcyon days. Speak to pundits and they’ll quickly tell you the past year has been strong on all fronts and, according to most, 2018 will be just as strong with the momentum expected to continue for the foreseeable future.
When you factor in the potential of increased traffic from Chinese tourists, Canada’s continued prominence on the global stage and the strength of the global market — barring any unforeseen circumstances — the future looks bright.
Certainly, hotels are basking in the glory, even in a world in which disruption has become a daily occurrence. As Brian Flood, vice-president, Cushman & Wakefield stated at the recent Hotelier/Marriott Hotels’ Investment Roundtable, “We’re coming off record-breaking years. So, while Airbnb has had an impact, it hasn’t had a huge negative impact on the hotel space.”
In terms of new construction, growth is solid. According to the Lodging Econometrics Global Construction Pipeline Trend Report, the total global pipeline stands at 12,631 projects comprising 2,127,794 rooms — representing year-over-year project growth of seven per cent.
There are currently 5,847 projects representing 1,101,707 rooms under construction, up six per cent YOY. In terms of projects scheduled to start construction in the next 12 months, there are 3,744, with a total of 548,876 rooms (up two per cent) while projects in early planning stages stand at 3,040 for a total of 477,211 rooms — up 17 per cent YOY.
So who leads the charge in terms of global hotels in the construction pipeline? The leading franchise companies by project count are Marriott International, with 2,405 projects/400,822 rooms; Hilton Worldwide, with 2,108 projects/315,603 rooms; InterContinental Hotels Group (IHG), with 1,491 projects/224,239 rooms; and AccorHotels, with 809 projects/151,416 rooms. The leading brands for each of these companies are Marriott’s Fairfield Inn (364 projects/38,986 rooms); Hilton’s Hampton Inn & Suites, (570 projects/71,795 rooms); IHG’s Holiday Inn Express (710 projects/87,150 rooms); and Accor’s Ibis (156 projects/23,863 rooms).
In Canada, growth opportunities still abound. As Ryan McRae, area vice-president of Marriott Hotels said at the recent roundtable, “Within our portfolio, there’s a lot of white space on the map still left in Canada for our brands, so we look at that as a huge opportunity getting into the secondary and tertiary markets.” Pundits agree big cities such as Toronto can handle more growth, predicting the city is going to see more development in the next few years.