Canadian Lodging Industry Overview - Hospitality & Gaming

NEW SUPPLY

STR reports that average supply growth over the past nine years was 1.3% annually. The latest STR pipeline report on new hotel development shows continued expansion across six of the top 10 markets in Canada. Brand proliferation continues to be a strong impetus for new hotel projects, and the majority of projects fall within the upscale and upper midscale categories. While speculation might suggest that many of the projects might not occur, the strong occupancy performance across much of the country, and the ‘in construction’ phase of many of the projects indicates a different picture is likely.

Calgary leads the hotel development pipeline in terms of percentage growth, at more than 18% – a worrisome issue considering the current market dynamics. Ottawa, Montreal, and Edmonton each are approaching 10% increase in supply on the books, followed by Toronto at 8%. Markets such as Toronto and Vancouver, with their strong performance, indicate significant opportunity for supply additions although site availability and development costs will continue to limit this growth.

Canadian Room Supply Pipeline by Product – Year-to-Date September 2017

Independents

Economy

Midscale

Upper Midscale

Upscale

Upper Upscale

Luxury

0

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

Planning Final Planning In Construction Unconfirmed

Source: STR Republication or Other Re-Use of this Data Without the Express Written Permission of STR is Strictly Prohibited

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