Hotel Online
News for the Hospitality Executive


advertisement
 
 

2010 Outlook - LE’s Canada Construction Pipeline

February 5, 2010

Lodging Real Estate Overview
With 153 projects/19,181 rooms at the end of Q4 2009, the total Con¬struction Pipeline has fallen 42% by projects and 44% by rooms from the peak in Q1 2008. The total project count is the lowest LE has recorded, while the room count is at its lowest since Q4 2004. Proportionately, the declines in Canada’s Pipeline are not yet as precipitous as in the United States, as Pipeline contractions are running 3-6 months behind the pace set in the US. 

Pipeline declines will continue into the middle of the decade, likely for one to two years after a recovery in operations firmly takes hold.
 

LE notes that:

44% of all Pipeline projects and 46% of total rooms are currently Under Construction. At 67 projects/8,859 rooms, Under Construction totals are down 25% by projects and 28% by rooms from the Q1 2008 peak. 

At 34 projects/3,813 rooms, counts for Starts in the Next 12 Months are the lowest LE has ever recorded. Projects are down 63% and rooms down 67% from the peak. These declin¬ing trends have accelerated over the last year.

52% of total Pipeline rooms are located in the five leading markets. Toronto, with 27 projects/4,624 rooms, remains the focal point for development in Ontario. Edmonton, with 14 projects/1,636 rooms, and Calgary, 11 projects/1,608 rooms, make up a majority of Alberta’s 40 projects/4,611 rooms.

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
With over 30 years of experience, Lodging Econometrics (LE) is the foremost source of global business development intelligence for hotel franchise companies. LE serves as your strategic planning partner. We identify every opportunity available to your company worldwide, based on your particular market share goals, sales objectives and brand specifications.

.
Contact: 

Jen Robertson, Marketing Manager
Lodging Econometrics
500 Market Street, Suite 13,
Portsmouth, NH 03801 USA
p: +1 603-431-8740, Ext. 19
e: jrobertson@lodgingeconometrics.com
 

.
.
 
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
.

To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| One-on-One |
Viewpoint Forum | Industry Resources | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.