The volume of planned and under-construction hotel projects in the country dipped slightly in the second quarter of the year.

The latest report from industry analysts Lodging Econometrics shows Canada’s hotel construction pipeline at 253 projects for a total of 33,240 rooms planned or under construction at the end of June. That figure is down 43 projects or 15 percent compared with the same period last year.

Lodging Econometrics blames the COVID-19 pandemic for the slowdown in volume in the first half of 2021, but is optimistic about the prospects for the market as more Canadians become vaccinated. It expects that pent-up consumer demand will help to establish some semblance of normalcy, with the travel and hospitality sector poised to benefit.

Projects under construction stand at 71 projects and 9,218 rooms, down 28 percent by projects and 25 percent by rooms compared to the end of the second quarter of 2020. Projects scheduled to start construction in the next 12 months are at 74 projects and 8,645 rooms. Early planning shows an increase of 19 percent over last year, with 108 total projects and 15,377 rooms. Such an increase is typical following an economic slowdown as developers are eager to move from the drawing board into the permitting phase.

Ontario continues to lead Canada’s construction pipeline, standing at 146 projects/17,799 rooms at the end of Q2 and accounts for 58 percent of the projects in the country’s total pipeline. British Columbia follows with 37 projects/5,806 rooms, and then Alberta with 23 projects/3,797 rooms, Quebec with 22 projects/3,166 rooms, and Nova Scotia with 8 projects/868 rooms. Collectively, these five provinces account for 93 percent of the rooms in the country’s total construction pipeline.

The top five markets continue to be led by Toronto with a cyclical high of 63 projects/8,527 rooms and 25 percent of all the projects in Canada’s total pipeline. Following distantly is Montreal with 14 projects/2,124 rooms, Vancouver with 13 projects/2,096 rooms, Niagara Falls with 12 projects/1,817 rooms, and Ottawa with nine projects/1,535 rooms. Combined, those five markets account for 44 percent of the rooms in the total pipeline.

In the first half of 2021, Canada had 19 new hotel openings. Lodging Econometrics’ forecast for new hotel openings predicts another 29 new hotel openings in the second half of the year, for a total of 48 projects/5,033 rooms to open in 2021 for a supply growth rate of 1.4 percent.

In 2022, the firm is forecasting 43 projects/5,344 rooms open, for a supply growth rate of 1.5 percent, and 2023 will have 54 projects/6,490 rooms open for a growth rate of 1.8 percent.