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Hotel renovation projects in Canada show substantial YOY increase at Q3 close

According to the recent Hotel Construction Pipeline Report for Canada by Lodging Econometrics (LE), LE analysts report that in the third quarter of 2022 the total construction pipeline in Canada stands at 263 projects/34,825 rooms, up 2% by projects and rooms year-over-year (YOY). At the Q3 close, projects presently under construction in Canada stand at 54 projects/6,984 rooms. Projects scheduled to start construction in the next 12 months are at 105 projects/14,270 rooms, a 24% increase by projects and a 37% increase in rooms YOY. Projects in the early planning stage show a slight 2% increase with 104 projects/13,571 rooms recorded. The Bank of Canada recently announced another interest rate increase to bring its policy interest rate to 3.75 percent. Even with this additional increase, building activity remains above pre-pandemic levels as developers continue to move projects forward. In the third quarter, Canada had 20 new project announcements with 1,463 rooms. Hotel renovations in Canada are up substantially YOY, with project counts three times larger than they were at this time last year. At the end of Q3 2022, renovation totals stand at 48 projects/5,808 rooms and conversion totals stand at 56 projects/6,505 rooms. Combined, renovations and conversions reached a cyclical high by projects and closed the quarter at 104 projects/12,313 rooms. Ontario is the most active province for pipeline projects in Canada at Q3 2022, with 148 projects/20,396 rooms. Next is British Columbia, at a record high by rooms, with 47 projects/7,239 rooms, and then Quebec with 20 projects/2,633 rooms. Together these three provinces account for 82% of the projects in Canada’s Pipeline. The top cities in Canada’s hotel construction pipeline, at the Q3 close, are Toronto with 62 projects/9,147 rooms, claiming 26% of all the rooms in the country’s total construction pipeline. Following distantly are Vancouver with record project and room counts of, 19 projects/2,694 rooms, and Montreal with 15 projects/2,140 rooms. These three cities alone account for 37% of the projects and 40% of the rooms in Canada’s total pipeline. Marriott International leads the top hotel companies in Canada’s construction pipeline with a record high project count of 73 projects, accounting for 9,977 rooms, followed by Hilton Worldwide with 64 projects/7,824 rooms, and InterContinental Hotels Group (IHG) with 43 projects/4,426 rooms. These three companies make up 68% of the projects and 64% of rooms in the total construction pipeline. The top brands in the pipeline are Hilton’s upper midscale Hampton by Hilton brands with 25 projects/2,872 rooms, IHG’s Holiday Inn Express with 21 projects/2,257 rooms, and Marriott’s Fairfield Inn with record high projects counts of 18 projects/1,678 rooms. Other noteworthy brands in the Canadian hotel construction pipeline are Home2 Suites by Hilton with 17 projects/1,821 rooms, TownePlace Suites by Marriott with 17 projects/1,811 rooms, and Hyatt Place with 10 projects/1,612 rooms. In the first three quarters of 2022, Canada had 19 new hotel openings, accounting for 2,015 rooms. LE’s forecast for new hotel openings predicts another 12 hotels/1,778 rooms will open in the last quarter of 2022, bringing the year-end total to 31 new hotel openings with 3,793 rooms, for a 1.1% room supply increase. 2023 is forecast to see another 1.1% increase in room supply with 37 new hotels/4,036 rooms expected to open, and in 2024 LE analysts anticipate that 42 new hotels, accounting for 4,042 rooms, will open and come online.

Tags: hotel construction, hotel renovation, Projects in Canada, substantial

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