LE: Canada’s Hotel Construction Pipeline Remains Strong

PORTSMOUTH, NH—The total construction pipeline in Canada remains strong at the close of the first quarter of 2019 with 264 projects/33,023 rooms, according to analysts at Lodging Econometrics (LE). Construction pipeline projects and rooms are both up 11% year-over-year (YOY).

A driving force of the pipeline’s double-digit growth is the surge in projects in the early planning stage with 80 projects/11,328 rooms, up 48% and 53% YOY, respectively. Currently, there are 93 projects/10,466 rooms under construction and 91 projects/11,229 rooms scheduled to start construction in the next 12 months, a record high.

The jump in early planning counts YOY is the result of a record number of new projects being announced into the pipeline during the fourth quarter of 2018, some 36 projects/5,380 rooms.

The forecast for new hotel openings in 2019 calls for 51 new projects/5,578 rooms to open. In 2020, counts are expected to rise with 62 projects/7,005 rooms forecast to open. Should all these projects and rooms come online, this will be a record high for annualized new hotel openings in Canada.

The top provinces in Canada with the most projects in the pipeline are Ontario with 139 projects/17,374 rooms, at a record-high and responsible for 52% of the projects in Canada’s pipeline. Next is Alberta with 38 projects/5,821 rooms and British Columbia with 37 projects/4,068 rooms. Together the three provinces account for 81% of Canada’s pipeline.

The top five cities within these three provinces starts with Toronto with 48 projects/6,570 rooms, at a record high and claiming 18% of all the projects in Canada’s total construction pipeline. Following distantly is Vancouver with 12 projects/1,448 rooms, Edmonton with 11 projects/1,735 rooms, Calgary with 11 projects/1,239 rooms, and Ottawa with 10 projects/1,684 rooms. These five cities account for 35% of the total pipeline.

The top franchise companies in Canada’s construction pipeline are Hilton with 56 projects/6,658 rooms, followed closely by Marriott International with 52 projects/6,788 rooms and InterContinental Hotels Group (IHG) with 46 projects/4,508 rooms. These three franchise companies claim 58% of the projects in the total pipeline.

The top brands in Canada’s pipeline are IHG’s Holiday Inn Express with 30 projects/3,109 rooms. Next is Hampton by Hilton with 28 projects/3,240 rooms and TownePlace Suites by Marriott with 13 projects/1,336 rooms—both reaching record highs.

Other notable brands in the Canadian pipeline are Courtyard by Marriott, at a record high, with 12 projects/1,796 rooms, Hyatt Place with 12 projects/1,786 rooms, and Best Western Plus with 12 projects/1,027 rooms.

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