According to the Q4 2022 Hotel Construction Pipeline Trend Report for Canada by Lodging Econometrics (LE), LE analysts report that Canada’s total construction pipeline stands at 267 projects/35,758 rooms, up 2 per cent by projects and 1 per cent by rooms year-over-year (YOY).
At year-end 2022, projects presently under construction in Canada stand at 52 projects/6,593 rooms. Projects scheduled to start construction in the next 12 months stand at 87 projects/12,098 rooms, a 2 per cent increase in projects YOY and a 15 per cent increase in rooms YOY. Projects in the early planning stage are at an all-time high with 128 projects/17,067 rooms, up 11 per cent by projects YOY and 2 per cent by rooms YOY.
Canada’s hotel construction pipeline should remain strong throughout 2023, despite the recent interest rate increase, as 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; 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 is the most active province for pipeline projects in Canada at the Q4 2022 close, with 153 projects and a record-high 20,996 rooms. Next is British Columbia with record-high project and room counts of 54 projects/8,211 rooms, and then Quebec with 18 projects/2,318 rooms. Together, these three provinces account for 84 per cent of the projects and 88 per cent of the rooms in Canada’s pipeline.
The top cities in Canada’s hotel construction pipeline, at the Q4 close, are Toronto, with a record project count of 65 projects/9,617 rooms. Following Toronto is Vancouver with 20 projects/3,008 rooms, then Niagara Falls with 13 projects/3,899 rooms.
The top hotel franchise company in Canada’s construction pipeline, at an all-time high, is Marriott International, with 79 projects/10,457 rooms. Hilton Worldwide follows with 64 projects/7,826 rooms, then InterContinental Hotels Group (IHG) with 41 projects/4,153 rooms. These three companies claim 69 per cent of the projects and 63 per cent of the rooms in the total Canada construction pipeline.
The top brands in Canada’s pipeline at the Q4 close are Hilton’s upper midscale Hampton by Hilton brands with 25 projects/2,872 rooms, Marriott’s TownePlace Suites with record high project and room counts of 20 projects/2,022 rooms, and IHG’s Holiday Inn Express with 19 projects/2,053 rooms. Other notable brands in the Canadian hotel construction pipeline are Fairfield Inn by Marriott with 19 projects/1,805 rooms, Home2 Suites by Hilton with 17 projects/1,821 rooms, and Hyatt Place with 11 projects/1,695 rooms.
Canada had 29 new hotels, accounting for 3,213 rooms open in 2022. LE’s forecast for new hotel openings in 2023 anticipates 31 hotels/3,756 rooms will open in Canada, for a 1.1 per cent room supply increase. LE analysts forecast another 1.1 per cent increase in room supply in 2024 with 39 hotels/4,147 rooms expected to open.