News for the Hospitality Executive |
2010 Outlook - LE�s Canada Construction Pipeline
February 5, 2010
Lodging Real Estate Overview
Pipeline declines will continue into the middle of the decade, likely
for one to two years after a recovery in operations firmly takes hold.
Key pipeline Metrics Global economic declines, as well as decreases in both domestic and incoming international travel, are weighing heavily on the lodging op¬erating environment. They are impacting developer sentiment as well. As the current development cycle comes to a close, Construction Starts have descended to a lower channel due to falling lodging demand and the tightening of lending, and will remain at low levels through mid-decade. Project cancellations and postponements have been elevated, but will soon begin to fall as the Pipeline has now been mostly purged of its less feasible projects and those that are not easily financed. New Project Announcements are at cyclical lows. This lower channel will continue well after demand and room rates start to recover.
LE�s Forecast for New Hotel Openings New Hotel Openings held at a historically high level in 2009, with 56 hotels/6,548 rooms coming online during the year. LE�s Forecast expects New Hotel Openings to remain elevated in 2010, with 46 projects/6,045 rooms scheduled to open as new supply. However, declining Pipeline totals will begin to impact in earnest in 2011, when only 31 new hotels/3,462 rooms are expected to open. Lower levels of future new supply will aid the industry�s operating recovery, as there will soon be fewer guestrooms to absorb. ABOUT LODGING ECONOMETRICS
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Contact:
Jen Robertson, Marketing Manager
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Also See: | Canadian Hotel Construction Pipeline At a High in Q1 2008 with 265 Projects/33,964 Guestrooms; Ontario Leads with 123 Projects / Lodging Econometrics / May 2008 |