Hotel construction volumes rise over last year
Canada’s hotel construction pipeline remains stacked with projects.
New data from industry analysts Lodging Econometrics suggests that at the close of Q1 2023, the country’s hotel construction pipeline stood at 283 projects for a combined 37,683 rooms. Those figures are respectively 10% and 5% higher than they were at the same time last year.
Bolstered by the return of travel, new project announcements (NPAs) in Canada saw significant growth in the first quarter. NPAs surpassed totals for each of the previous five quarters to stand at 27 projects and 3,806 rooms at the close of the first quarter. As a result of the growing number of NPAs, projects in the early planning stage hit a peak for the country with 145 projects and 20,583 rooms, up 38% and 36% over the previous year, respectively.
Other pipeline metrics at the Q1 close include projects that are under construction, which stand at 47 projects and 5,802 rooms, while projects scheduled to start construction in the next 12 months are at 91 projects and 11,298 rooms. Additionally, combined renovation and brand conversion projects reached a record-high total at 105 projects and 11,598 rooms.
Ontario continues to lead Canada’s construction pipeline with record-high project and room counts of 162 projects and 21,945 rooms. The province and accounts for 57% of the projects and 58% of the rooms in Canada’s total pipeline. British Columbia follows, also reaching record-high totals of 55 projects and 8,670 rooms. Quebec followed with 21 projects and 2,555 rooms.
The cities with the most projects in the pipeline included Toronto, with 61 projects and 8,763 rooms, Vancouver (23 projects and 3,634 rooms) and Niagara Falls (16 projects and 5,088 rooms). The latter two both reported record-high project and room totals at the Q1 close.
Three franchise companies dominate Canada’s construction pipeline at the close of the first quarter, accounting for 65% of the projects and 60% of the rooms in the country’s total pipeline. These companies are led by Marriott International with 78 projects and 10,305 rooms, followed by Hilton Worldwide with 64 projects and 7,850 rooms, and InterContinental Hotels Group (IHG) with 43 projects and 4,347 rooms.
LE’s forecast for new hotel openings in Canada calls for a total of 31 new hotel projects with 3,744 rooms to open in 2023, marking a 1.0% new supply growth rate increase compared to 2022 totals.
In 2024, LE analysts expect a 1.1% increase in room supply with 68 new hotel projects and 4,048 rooms forecast to open by year-end.