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HomeHotels & Lodging33 new hotels with 3,287 rooms have been announced into Canada`s new construction pipeline
Lodging Econometrics (LE) reports

33 new hotels with 3,287 rooms have been announced into Canada`s new construction pipeline

Lodging Econometrics (LE) has announced in its quarterly Canadian Supply Side Forecast Report that 33 hotels having 3,287 rooms were announced into the Construction Pipeline in 1Q 05

Lodging Econometrics (LE) has announced in its quarterly Canadian Supply Side Forecast Report that 33 hotels having 3,287 rooms were announced into the Construction Pipeline in 1Q 05, bringing the total Pipeline to 185 hotels/19,734 rooms. Projects in the Pipeline average 106 rooms.



Patrick Ford, President, said, It`s a strong increase for the quarter and reflective of improved developer confidence about the future. The economy is gradually improving, the lodging industry is in its second year of recovery as demand improvement is quickening, and construction financing is more readily available, and at attractive terms.



After accounting for project cancellations and the removal of new openings during the quarter, the net increase for the Pipeline was 21 hotels/2,145 rooms – a 13% increase.



LE forecasts a 1.0% net supply increase in `05



LE forecasts that 47 newly constructed hotels having 4,183 rooms will open in Canada in `05, which will result in a 1% net New Supply Increase after accounting for hotel closings and conversions to alternate uses. Present trends indicate that New Openings will increase to at least 51 hotels/5,023 rooms in `06. Ford said, The `06 numbers could increase even more because greater than one half of all new project announcements are smaller Economy projects, mostly in the outer suburbs of major cities or in secondary and tertiary markets. They average a very quick 20 months from day of announcement to day of opening.



Majority of pipeline activity is in the ten largest cities



134 of the 185 projects in the Construction Pipeline, or 72%, are in three provinces – Ontario, British Columbia and Alberta. 56% of all projects and 67% of all guestrooms are concentrated in the 10 largest cities. 28 of the construction projects are in Toronto, 20 in Niagara Falls, 19 in Vancouver, 12 in Montreal, nine in Halifax, followed by six in Edmonton.



Cendant brands account for over 40% of projects in the pipeline



Cendant brands – at 76 hotels/5,466 rooms – account for 41% of the projects in the Pipeline. Super 8, with 61 projects, is by far the most popular brand in the Pipeline. Days Inn – another Cendant brand – follows with 11 projects.



Holiday Inn Express and Best Western also have 11 projects, while Courtyard by Marriott has eight projects and Marriott`s Residence Inn has five projects. The increasingly popular Hilton Garden Inn also has five projects in the Pipeline – three of which will open in 2005.



41 projects/5,100 rooms presently in the Pipeline are designated as Independents. However, LE estimates that at least half of them will choose a brand prior to starting construction.



Ford said, LE expects the pace of new project announcements to accelerate as demand more completely recovers and we move deeper into lodging`s recovery cycle. That will be followed by the expansion phase of the cycle, which will be characterized by growing supply additions through the end of the decade.

Theodore Koumelis
Co-Founder & Managing Director - Travel Media Applications | Website

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.

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