Business Fundamentals
Hotelier: How would you characterize this past year for your company specifically?
Bob Singh: A great year. Occupancy is up. ADR is up. Most of our hotels in Northern Ontario are doing excellent, and hotels in the Maritimes are doing very good. But now we kind of see the transient is a little bit down. I hope it’s just temporary, but let’s see what happens.
Linnea Chamberlain: This year, I guess it’s been a duality fi a really great year financially, and a great year with staff recruitment and retention. It’s been difficult with just the stops and starts and delays, and trying to get projects finished so we can concentrate on new projects.
Christine Kennedy: At Atlific, it’s been a really great year. I would say that over the 12-month period, our occupancy has been up 1.3 per cent, ADR has increased 4.9 per cent, and RevPAR has increased 6.9 per cent. The only areas that we’re seeing some difficulty is in our resort properties where climate change is impacting the occupancy and the business levels there. Overall, I would say our city centres and our upper-scale properties are leading our growth.
Duncan Chiu: It’s been another positive year. The general sentiment is that from a development standpoint everyone has been extremely busy, but [projects] are taking much longer to get done. So, whether it’s pressures on the financing side that’s still a little bit constrained, although it’s improving with some of the interest rate drops; construction costs are still somewhat elevated but coming down a little bit; or working with municipalities that have a little bit of red tape getting through the entitlement process, which is slowing things down. But from an operation standpoint, the markets out west are performing well. B.C. has great fundamentals; Vancouver is doing very well as always. There’s a supply and demand imbalance. We’ve got the greatest number of cruiseships coming into town which is very positive. It’s still a very strong leisure-driven destination. Resort markets such as Victoria and Kelowna are still doing well from a leisure standpoint. That’s starting to taper down a little bit [because] people’s wallets are being a little bit more constrained now. Alberta is a really exciting story with a lot of population growth, diversification of the markets and also everything happening at Stampede Park with BMO Centre and also the event centre, so that all bodes well for development.
Sukhdev Toor: In the last 12 months, we’ve seen extensive growth in our company. We acquired nine hotels. Last year, we had 18 per cent RevPAR growth Canada-wide and this year we’re holding on the same. I see strong growth going forward as we expect the industry to come down. And within G7 countries, we see our GDP growth will continue due to new fundamentals of housing debt going down and interest rates coming down. We see strong fundamentals going forward.
Roz Blaker: From an operational perspective, globally our RevPAR has been up 4.9 per cent as of Q2. In Canada, our budget is a four per cent RevPAR increase and we’re hopefully going to make it. Two months ago, we were definitely going to make it, and then a month ago we weren’t sure. And then June picked up, but July was down. So, everything is very short-term. From a group perspective, we’re strong. We have a diversified portfolio, so we’re in city centres and secondary, tertiary markets. But it’s a little bit of a nail biter through the end of the year whether we’re going to meet our numbers. The business is strong, the fundamentals are strong, but we have aggressive targets.
Perry Vashee: For us, in the markets that we’re in, it’s been a little flatter compared to last year. We’re holding occupancy and rate, but it has become more challenging to hold rate fi especially in certain markets where maybe some of the competition has dropped some rate. We did better in August, but we were short in July. But overall, we’re quite optimistic. We feel we’re going to meet our budgets this year. And going into next year, we’ll start seeing a little growth for sure.
Aaron Laurie: Regionally in Central and Atlantic Canada, we’re still seeing strong metrics. Last year, we saw strong RevPAR growth and year to date, to everyone’s point, demand is starting to trickle down a little bit but rate is still persisting. So, if there’s RevPAR growth this year, it’ll come out of rate for those particular regions. Over the past 12 months, we’ve seen a strong number of ground breakings, despite some of the holdups in projects post-pandemic.
What we’re starting to see is because we’re seeing stabilized levels of net income, it’s becoming a little bit clearer for appraisers, for consultants to define what the prospective market value is. And with development costs, I don’t want to say normalizing, but at least not seeing heavy year-over-year growth now, it’s getting a little bit better in seeing the prospective market value versus costs. And just as long as the market value is meeting or exceeding that cost, we’re seeing different financing solutions come about. And that was one of the biggest hurdles to overcome for a lot of these projects that have been on hold for quite some time. So, it’s really great to see some of these projects that have been signed for two, three years finally start to break ground.
Monique Rosszell: [The last two years]are probably our banner years at HVS, partly because during COVID, nobody had their hotels appraised because the cashflows weren’t there. So, now everybody is looking to get appraisals in order to take equity out and do renovations, et cetera. That’s from the existing hotelier’s standpoint. Because of the challenges in office real estate as well as condos, we’re seeing new entrants come into the market that have never held hotels before. And hotels, which were not the darling of the real-estate industry before, are becoming the darling of the industry. So, we’re seeing more entrants from that perspective. We’re also seeing a lot of opportunity in conversions, so we’re seeing office space where we get calls and say, what if we were to convert this to a hotel, or condos being converted to hotels, et cetera. It’s a busy market out there.
Hotelier: Over the past year, inflation has become a huge factor across Canada, and around the world. How has this impacted ADR and occupancy?
MR: Just to give some perspective, if we compared 2023 to 2019 ADR, in 2019 fi and I’m not going to speak about a particular market but Canada as a whole fi ADR was at $165. At the end of û23, ADR was at $200, so we look at a $35 increase. But when I take inflation into account, that $200 is $173 and ADR is really up $7 or $8. Occupancy is back; 2023 occupancy across the country exceeded 2019. And so, from a RevPAR perspective, we’re up $6 or $7 over 2019 when you deflate everything.
When we look at the year-to-date numbers, what we’re seeing in 2024 is that it’s at the luxury level that there is price resistance now. And in 2024, the sector where the ADR has actually decreased year to date through July is the luxury sector. All the other sectors have continued to grow slightly.
RB: We talked a lot about ADR and what I’m hearing, when I talk to our owners and our franchisees and management companies, is that we’ve got to maintain rate because the costs are just going up. So, there has been pressure on the middle of the statement, tons of pressure at the bottom line. And to the point about the normalization of what the actual rate increase is, that speaks to what’s flowing through the bottom line. The labour environment is very intense right now as we know in some major markets in Vancouver and Montreal. And the rhetoric around, ‘oh, look at the big companies, they’re making all this money,’ doesn’t necessarily help when it comes to really looking at the economics of what it takes to run a quality hotel, which is what we all want to do. There’s a ton of pressure on the ability for owners and franchisees to make money. From a consumer perspective, people still want to travel. And maybe they’re trading down from luxury but we have a lot of different product offerings throughout the world, throughout Canada, that meet the various needs. We’re seeing leisure throughout the summer as being very strong but in different markets. People are trading from maybe the formerly go-to markets to let’s try a different market, a different experience. But I don’t see the level of inflation really changing people’s habits, and the need for travel is incredibly strong.
BS: Pre-COVID, if a hotel was doing $4 million, you could make 35 per cent EBITDA but it’s come down to 30 per cent now with the same revenue. To make that same EBITDA, you have to do half a million dollars more revenue, so that’s been challenging.
Investment Trends
Hotelier: What factors do you consider when evaluating a hotel investment opportunity?
CK: For Atlific, because we’re primarily a third-party management company, our role in helping our current owners and prospective owners is to provide that advisory factor. We know the markets and we’re helping them assess based on the availability of credit for them, or how they want to integrate it into their portfolio. And as was mentioned earlier, we’re seeing a lot of new ownership groups coming into the space who are dealing primarily with commercial real estate. So, their understanding of what makes a great hotel investment is a little bit different, and we have to really hold their hand through that process. They’re not understanding the fluctuation of rates and what that means to the bottom line. They’re looking at it as number of doors. So, we really have to try and help them through that process.
MR: The first thing when a client calls and mentions that they’re looking at potentially developing a hotel, is I want to know what the land cost is. Because land cost is an incredibly important component of the development, and we all know that land costs have just escalated through COVID. So that’s number-1. And then obviously number two is, what type of density they can get on the site, because that’s going to reduce the cost per door. So, in terms of the overall investment, once they’ve looked at land cost, and construction costs, it gives a much better idea as to whether the project is going to be viable.
Hotelier: How important is location when it comes to hotel investments, and what are some key considerations in helping you select the right location? Which locations are attractive at this time?
LC: From an architectural perspective, it’s critical that owners, when buying land, understand the regulatory approvals or encumbrances they have on a site. And a good planner is also critical to some of the more complex sites fi knowing how far you can push the boundaries for re-zoning or minor variances and so forth, increased density, parking ratios, any encumbrances from train, rail. I guess another side is just we’ve adapted to the fact that there aren’t any perfect sites that are rectangular in nature, that fit everything, that’s going to be easy. Everything we do now is in planning and due diligence. And it’s easy, I’m going to say, to get a good cladding, skinning of the building, so not to worry predominantly about the design. For us, it’s the critical programming of the site, of what the yield can be. And working with our client to say, how many storeys, how many rooms, size of rooms, parking, too much, too little? And just working on spending the time in programming at the beginning before we jump ahead to the design.
DC: Location really depends on the demand generators and on the different product types we’re putting into markets. So, it’s first and foremost understanding where your customer is coming from and putting your hotel that way. The conversation around location has also changed. Whereas in the past we’ve always talked about having hotels with great visibility, you can see it on the highway, which is still the case today, but people also have their GPS and their iPhones, they can just put the location on and that can take them to the hotel right away. But when we’re looking at specific locations and how we’re making site selections, it’s first and foremost understanding where that demand is. We just entered into the midscale segment over the last 12 months globally with our extended-stay mid-scale brand StudioRes that’s focused on new builds in secondary and tertiary markets. We’re really trying to find markets that can sustain true extended stay and what I mean by that is demand from 15 to 30 nights onward. So, these are travelling nurses, construction crews, people displaced because of insurance claims. It really acts almost like a Class B residential product, so that’s what it’s really competing against. We recently launched a new mid-scale transient brand that’s very conversion friendly. It’s currently called Project Mid-T, we’re still finalizing the name of it, but it’s going to be focused in U.S. and Canada, and looking at conversion-friendly opportunities in secondary and tertiary markets. And we feel with the breadth of our portfolio, adding mid-scale to Marriott Bonvoy is going to be great for our customers and be able to continue to increase the loyalty platform for Marriott Bonvoy.
Hotelier: What are some best practices for successful hotel investment management and operations?
CK: On the operational side particularly, we’re seeing revenue management is critical, obviously, and then efficiencies with operations. We need to look at both the guest and our associates and ensure that they’re feeling listened to and that we’re driving their experience to something that they can come away with and enjoy. We have to clearly manage the financials and look at cash flow, because cash flow for our owners is so important, whether it’s for them to service their debt or to look at new opportunities for acquisition.
Hotelier: How do hotel investments compare to other types of real-estate investments in terms of risk and return?
MR: Hotel investments are riskier than other types of real-estate investments [because] there are no leases and no long-term confirmed revenue. You can go from 100 per cent occupancy one night to zero per cent the next and we saw that during COVID. All the other real-estate asset classes weren’t immediately impacted the way hotels were. The benefit of that is they’re riskier investments, but the returns are greater, so the cap rates are greater. And most people, once they’ve owned a hotel, they get addicted. So, all these commercial real estate holders that have never had hotels, they start with one, and before you know it, they’re looking at two, three. It’s completely different than owning an apartment building.
Hotelier: What are the typical exit strategies for hotel investments, and how can investors plan for a successful exit?
LC: I could speak more in the architectural realm with adaptability. I would say things like, don’t make it so tight fi have some flexibility in the design so that you can use another type of building if need be. We’ve had projects where we’ve taken hotels to long-term care homes or office buildings to hotels. We’re doing one in Toronto right now. Not every office building is the right floorplate for a good hotel conversation. But if you’re building and looking for an exit strategy, we’ve never been big proponents of wood construction because in the future if you’re going to have different uses, there are requirements and codes for flame separation and fire ratings and so forth and wood doesn’t always give that to you like concrete does. The majority of our hotels have always been pre-cast and concrete block, or HDL with pre-cast so there’s the ability to convert to other uses just through the structural framing of this building. I would say don’t make everything so tight to the millimetre so that there’s no ability later and don’t make your window area of glazing so tight that you can never have some flexibility in your interior floorplate.
MR: A healthy exit strategy would be to hold any new developments until they’re stabilized because you’re not going to get your true return on investment until the property is stabilized. And like Linea said, the flexibility. If the site is big enough for an expansion, make sure that the way that you develop it, that you can expand through another wing, or make sure you put your mechanicals in a good position to be able to do the expansion. Also consider the holding period fi it’s critical that hoteliers look at how long they’re willing to hold a hotel. Because there’s no question that the average holding period being 10 years, if they’re not in the market until that’s stabilized, and perhaps there’s new supply coming into the market that’s going to disturb that stabilization period, they need to look at it on a more long-term basis.
DC: We’ve been seeing a lot of non-traditional hotel players entering into the market and a lot of these people have the idea that they can basically entitle the project and enter into some sort of for-sale agreement with potential buyers. That’s very challenging, so our advice has always been to get a great brand in there, get a great management company in there, get it cash flowing and prove that its cash flowing because hotels are value-based on cash flow, and then look to exit. Because it’s very difficult when you’re just trying to sell to a third-party investor to come in and buy this project when it’s not proven.
Hotelier: What other growth opportunities are available for hospitality brands and companies?
PV: There’s still a lot of room in the extended-stay market. It gives owners and operators flexibility. In certain markets where housing is a problem, it gives the flexibility for families that are moving, et cetera. We’re also seeing, especially in markets that are resource driven and people are coming for long periods, the extended-stay hotels are very attractive. And when they’re run properly, they’re very profitable, too. A lot of markets that are underserviced right now, it’ll allow developers and investors to get into smaller markets that would benefit from these products. And what we’ve also seen is that these markets are not necessarily rate sensitive. Obviously, there’s a cap on how much product they can take, but I do think that these extended-stay products that are coming out will be well suited for those markets.
Hotelier: What is your long-term economic view (three to five years)?
PV: Well, my personal view is I’m in this industry and I love it and I think it’s always going to be great. It’s cyclical. I always tell people that if you believe in the industry, then you double down, if you want to call it that, but being careful. As for the long-term growth in Canada, a lot of newer markets have opened up and people have moved out into some of these markets, so they’re looking to be serviced. There’s a lot of opportunity from that growth perspective and I think from the overall hotel perspective. Travel is now in our DNA as humans and more and more people want to travel. They’re going to be cost conscious, but they want to travel. The outlook is really good. But I do think operators have to be careful how they operate and manage their expenses. I think labour is going to be a big factor.
ST: It’s dependent on what happens with the economy fi GDP is going to keep growing and [the hotel industry] will grow as well. Also, construction costs have gone up and we’re not bringing as much supply but demand is growing and they’ll dampen the new supply. We’re building and managing. But it’s not easy to go through municipalities to build these new hotels, even small municipalities such as Newfoundland and St. John’s, and it’s a long process. We’re building in downtown [Toronto] now, it takes time. But I think we’re in good shape here. We have better product than in the U.S. We’re not immune to what happens in the world, so it could change, but as I see, we have good steady growth.
Trends
Hotelier: What have been the most significant trends driving the business today. How are they impacting your business?
AL: We’re still big believers in extended stay. With the launch of StudioRes, we’re continuing to venture through the extended-stay journey in the mid-scale space. We’ve got to remember in Canada, extended-stay brands are not just meant for long-stay customers. They cater to sports teams or families that just want the added space of the suite. Having a fridge inside of a room goes a long way from a guest-satisfaction score, and that’s really reflective in the performance of some of these extended-stay hotels. We’re quite bullish on extended stay. The one other trend I’ll talk about, is unique accommodation experiences from all different generations, from all types of travellers, whether it’s leisure, corporate or group. Everyone is craving those unique accommodation experiences. And that’s why we’re seeing a continued uptick in interest around our lifestyle brands, around our soft brands, particularly in urban cores. Now, typically with those brands they tend to have a little bit more of a custom, unique design narrative. We typically have developers engage both a branding agency as well as an interior design agency to have unique outlets, unique design narratives, all engrained within the guest rooms, the public spaces, et cetera. And that’s really what guests are craving. They’re craving that Instagrammable moment, that unique food-and-beverage outlet, and we’re excited about it.
LC: From an interior design/architectural perspective, I’d say some of the trends are dealing with zero carbon, we’re dealing with EPDs and understanding what materials carry the EPD certification and knowing that it’s not more money to spend to source those materials that have the EPDs. And I see now we’re getting into a little more of the interior design customization for suites and for ground floor. As to the exterior design, it’s about understanding the market and designing a building that reflects that market and the intent of the product.
Hotelier: What major consumer shifts do you see impacting the hotel industry moving forward?
CK: What we’re seeing is that business travel hasn’t come back to what it was and we don’t believe that it really will ever come back to where it was. Group [travel] is back. There’s going to be hybrid solutions that we’ll be looking at, too. Companies have spent so much money in terms of allowing their workers to work from home so, as we move forward, we’ll have to incorporate some of that hybrid nature into our offerings.
PV: For us, the market segments are changing as well but we’re looking for different sources of segments. In soft brands, we’re really pushing cycling companies, tour companies, et cetera. It’s a little bit more focused and takes more effort, but we’re seeing those as emerging groups. Corporate is a struggle and I think it’s changing. How that evolves and how we adapt to it, time can’t fully predict.
MR: In terms of occupancy across the country, we’re back to where we were in 2019. And as Christine said, the business traveller is not back. That has been substituted with this high demand from the leisure traveller. Our international conferences are also not back. So, if we look at major cities like Toronto, we’re still seven points down from where we were in 2019 and the reason is because we don’t have the conferences yet. Now, those are cyclical, and the typical cycle is four years. In 2020, nobody was looking at booking international conferences. When those international conferences do come back, and they may come back in smaller sizes just because of the virtual aspect that’s available now, we foresee that the occupancy in Canada is going to be higher than it was pre-COVID. It’s just going to take time.
Hotelier: Are changing demographics impacting the design of hotels?
PV: A clean room is a constant. It doesn’t matter what demographic, it’s a constant. But I think technology, from a design perspective we find, especially the younger generation, they’re not as interactive with people at the front desk, et cetera. They want quicker responses, and they’re very on demand with information. Technology plays back into that for us more than just design. For example, we have the ability now to text customers and most hotels will just text the customer and say, how’s your room? We’re trying to take it a little further where we’re marketing with that, letting people know what time the restaurant closes, if there’s anything special going on, without invading their space too much. But we’re finding that the younger generation prefers to text back and forth. But what it’s doing for us is now it’s going to slowly limit our interaction with the customer and I believe that if you’re doing it well, then that’s your differentiator sometimes. We’re hoping that as brands, as we invest more money into AI et cetera, then we’ll be able to take that data from those [digital interactions] to help us be more efficient, maybe also generate some revenue streams.
LC: We’re seeing that quality is timeless if you’re trying to hold these properties and not renovate every five years. Clean, to your point Perry, but also simpler, cleaner design is what we’re seeing fi do less but do it well.
DC: There’s always a lot of conversation about demographics, but there probably should be more conversation about the psychographics of the customer. Because we’re seeing a huge uptick still in some of the soft brands and lifestyle brands. So, regardless of age, demographic, people like these unique concepts. An example would be, the Moxy Banff we just opened which, when you look at the brand, it’s really catering to the younger generation. But the hotel will tell you, you’ve got 60-, 70-year-olds staying there, and they love it. And so, it’s really thinking about each customer differently, what that psychographic is, instead of the demographic. From a design standpoint, you’re going to continue to see a lot of these lifestyle hotels play out which focus on design and story, and a lot of consumers like that.
Challenges
Hotelier: How are labour shortages impacting your company and what have you done to deal with this problem?
PV: In the GTA, it’s gotten a little bit better, but we find that there’s few entrants into the market. And then when they see what housekeeping is all about, et cetera, it’s not for them. So, we’re trying to work with our existing staff to be a little bit more flexible. We’re finding our customers also have changed a little bit about how they check out, et cetera. People have kids to drop off, et cetera, so we’re trying to be more flexible in how we operate and give back a little bit in terms of flexibility on hours and timing. Overall, I think everybody has reduced the expectation of number of rooms cleaned. And we’re trying to create an environment that’s more holistic and where people feel like they belong. I know every hotel tries it, but we’re putting a lot of emphasis on that with our existing staff.
In terms of attracting people, we try to make sure that we have a good training program and we are obviously raising our rates to try and be more competitive with other industries. But in smaller markets, especially in Northern Ontario, we do struggle. We’ve got a couple instances where we’ve actually bought houses and are housing people in order to attract people coming out from the GTA to be able to live there. They do pay rent, but we made it very reasonable. We’re trying to be innovative in the way we’re tackling.
CK: We’re struggling with attracting labour, but the availability of staffing has improved since the pandemic. We have to really focus on employee initiatives to engage them. The younger generation won’t accept perhaps what we old people would have done in the past. And so, we really have to be innovative. We have to show flexibility. It’s harder to do in the hotel environment. In the management company, we’re allowing a certain number of days of working from home. In some of our resort locations, we’re using temporary foreign workers. We try to do our due diligence to make sure that if we’re contracting with a third party for those foreign temporary workers, that we want to feel very confident that they’re doing the right thing and not taking advantage of the individuals that are helping in our hotels.
LC: In construction, I don’t know if it’s a labour shortage as much as it’s a knowledge shortage. So, for us internally, it’s been spending a lot of time trying to empower senior staff to make decisions and to say they know the answers. We’ve been spending a lot of time and I see it working internally. Construction, I don’t have the answer. We’ve tried Revit, we’ve tried 3D drawing, we’ve tried pictures instead of words for people that English isn’t a first language. But we’re seeing the means and methods that aren’t architectural realm becoming our realm. And so, we’re trying to determine, do we take that on, or do we fight it? I don’t have the answer yet, but just we’re working on it constantly of how we can improve our drawings to take risk out, how we can make things easier. But I think holistically, all humanity needs to go back to just owning stuff, and driving things forward, and making decisions, and just move forward, keep pushing forward.
BS: There’s a challenge in Maritimes, I find, but recently we were introduced to a preferred employer program for foreign workers. We don’t bring people from overseas, they’re already here on work permit but we can support their application. So that has helped a little bit, but the market is improving also.
RB: What keeps me up at night is access to talent. The biggest issue [I hear from owners] is, I need to find a director of Sales, I need to find a GM, I need to find an above property operator. We need to address the labour shortage in some of these secondary, tertiary markets. So, it really worries me from a strategic perspective. I think it’s super important that we work through our business councils at a local and a national level, to make sure that the immigration strategies and guidelines help to support our industry today and moving forward. I don’t know how we’re going to find the qualified directors of sales, GMs, operational leaders, unless we start building that infrastructure today.
Hotelier: What part of the country do you expect to see the strongest development?
BS: We see a lot of opportunities in Alberta and in the Maritimes. These are the two places we see that we are going to grow in next couple of years.
ST: We are focusing on downtown Toronto currently – 184 Spadina, 38 Camden, 471 Richmond West and 689 King. We acquired those lands over time. and have going through the process of design and getting SPA approvals. We’re also opening at 203 Jarvis under our own name, a soft brand, in a couple months.
CK: There’s some pent-up demand that were seeing with both our current ownership groups, and with some new players that we haven’t dealt with before. Clearly, there’s tremendous interest in the Vancouver market, in Calgary, and even Ontario. A little bit of Nova Scotia. But we’re seeing more activity, more people coming to us to take advantage of those markets, and I think it’ll be very exciting.
DC: Canada is still experiencing very strong population growth and investment that just in turn creates more commercial development and opportunities for hotels. After COVID, I mentioned Victoria and Okanagan, and I’m sure in Ontario, Niagara Falls and many other leisure destinations will continue to grow. Also, a lot of the secondary and tertiary markets across the country where the markets have matured, the traveller is maturing, they want better product. A lot of those markets don’t have a lot of great quality product. But there’s certainly just general population serving developments and happening, whether it’s community centres, aquatic centres, conference centres that in turn need more hotel rooms. And that’s not just new construction, it’s also on the conversion side, because a lot of times in those markets, you just can’t justify new construction, the numbers don’t pencil. It’s a big focus for us is on the conversion side as well.
PV: For us, from a management perspective, we see a lot more new owners coming in and we see that as an opportunity for us, especially in the Ontario market, and going out east. We’re entering the Quebec market right now, so we see some opportunities there, as well as the Maritimes. From a development perspective, smaller-town Ontario right now, and definitely the Atlantic provinces, more around Nova Scotia, New Brunswick. I think there’s some opportunities there.
MR: We’re seeing a lot of growth in non-traditional hotel formats. A lot of these opportunities involve nature for this experience. Small properties, as I say, new developers into the market that traditionally haven’t had hotels and just the variety of product that the market is expanding particularly on the leisure side.
AL: From a developmental perspective, Ontario represents our largest footprint in terms of existing hotels as well as pipeline hotels in Canada, so we’re going to continue to see a lot of pipeline growth in Ontario in general. The GTA has a lot of infrastructure projects going on and a lot of population compression which is spurting out to some of the secondary locations around the GTA. We’ll continue to see a lot of interest there. Montreal, Ottawa is continuing to post strong metrics. Atlantic Canada, particularly Nova Scotia and Halifax over the past few years has shown incredibly strong metrics which has driven a lot of interest in the area. In terms of other development, we’re seeing a lot of interest in what I like to call hidden-gem markets. Hidden-gem markets are almost tertiary markets with announcements of small infrastructure projects or small commercial projects. Whether it’s an EV battery park, whether it’s an automotive manufacturing facility. In a small tertiary market, having a base foundational demand generator like that can allow or can support one or two new small hotels within that area. And in these markets, that’s where cost of land, development charges, are still accessible, I should say. The barriers to entry are not as heavy as what you typically see in an area like Metro Vancouver or Greater Toronto Area. The economics tends to lean more towards the favourable side, just as long as you have that base foundational demand.