Canada’s hotel pipeline finishes ’22 strong
Hotel construction projects in the early planning stages in Canada have never been higher – another sure sign that the hospitality market is rebounding from the effects of the COVID-19 pandemic.
Industry analysts Lodging Econometrics (LE) released their fourth quarter 2022 report for the hotel industry in Canada on February 2. The data finds that Canada’s total construction pipeline stands at 267 projects/35,758 rooms. Those figures are up 2% and 1% respectively over last year’s fourth quarter totals.
At year’s end, there were 52 projects with a combined 6,593 rooms under construction across the country. Projects scheduled to start construction in the next 12 months stand at 87 projects and 12,098 rooms – increases of a 2% and 15%, respectively, year over year.
Meanwhile, projects in the early planning stage are at an all-time high with 128 projects/17,067 rooms – up 11% by projects and 2% by rooms year over year.
LE forecasts that Canada’s hotel construction pipeline should remain strong throughout 2023 – despite recent interest rate increases. Building activity and new-project announcements remain above pre-pandemic levels. In the fourth quarter, Canada had 24 new project announcements with 3,122 rooms. Both figures are the highest they’ve been in 13 quarters.
At year-end 2022, combined renovation and conversion projects in Canada reached a record high of 105 projects, accounting for 12,141 rooms. Renovation totals closed the fourth quarter standing at 50 projects/6,080 rooms and conversion totals are at 55 projects/6,061 rooms.
Ontario was the most active province for pipeline projects in Canada at the close of the fourth quarter. The province counted 153 projects and a record-high 20,996 rooms. British Columbia followed with record-high project and room counts of 54 and 8,211. Quebec counted 18 projects and 2,318 rooms. Combined, those provinces account for 84% of the projects and 88% of the rooms in Canada’s pipeline.
The top cities in Canada’s hotel construction pipeline, at the Q4 close, were Toronto, with a record project count of 65 projects/9,617 rooms, Vancouver (20 projects/3,008 rooms), and Niagara Falls (13 projects/3,899 rooms).
LE says that 29 new hotels, accounting for 3,213 rooms opened in Canada in 2022.
Its forecast for new hotel openings in 2023 calls for 31 hotels and 3,756 rooms – an increase of 1.1% in the number of rooms. Analysts forecast another 1.1% increase in room supply in 2024 with 39 hotels/4,147 rooms expected to open.