News for the Hospitality Executive
New Hotel Projects in Canadian Pipeline Showing Modest
PORTSMOUTH, NH, June 1, 2011 – Lodging Econometrics (LE) has released its Spring report on hotel construction in Canada, showing the Construction Pipeline with a total of 124 projects/15,860 rooms at the end of Q1 2011. Canada’s Pipeline has been in a bottoming formation for five straight quarters, but is poised for potential growth, as New Project Announcements into the Pipeline have been trending upward modestly for more than a year and the rate of New Hotel Openings exiting the Pipeline as New Supply has been in decline.
At 16 projects/1,857 rooms in Q1, New Project Announcements into the Pipeline have been increasing gradually, evidence that developer confidence may be improving. As a result, projects in the Pipeline Scheduled to Start Construction in the Next 12 Months, at 47 projects/5,455 rooms, are up 20% and 17% year-over-year, respectively. Also, Early Planning counts of 36 projects/4,806 rooms are up 6% by rooms year-over-year, as construction projects are increasing in size.
Due to declining Pipeline counts, New Hotel Openings will come at a slower pace in 2011, keeping future supply growth rates at low levels, thereby aiding the recovery in lodging operations. 13 new hotels with a total of 1,270 guestrooms opened in Q1 2011. LE’s Forecast for New Hotel Openings expects a further 25 new hotels/2,590 rooms to open during the remainder of 2011. Due to the recent uptick in New Project Announcements though, New Hotel Openings will increase modestly in 2012, with 38 new hotels/4,928 rooms expected to exit the Pipeline as New Supply.
With declining economic trends now concluded, and as hotel operations show a bit of a rebound from recessionary bottoms, LE anticipates Canada’s Construction Pipeline to remain in a bottoming to slightly increasing formation through 2011 and 2012, as New Project Announcement trends are expected to increase at only a modest pace. The key to further Pipeline growth is a greater acceleration of the broader economic recovery and in lodging operations, which will spur a new wave of lodging development. This will not likely occur until mid-decade.
OTHER PIPELINE NOTES:
With over 30 years of experience in lodging real estate, Lodging Econometrics (LE) provides an array of products and services to a global clientele, including hotel franchise companies, real estate ownership groups, management companies, REIT’s, opportunity funds, lending institutions, consultants, and vendors to the lodging industry.
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Outlook - LE’s Canada Construction Pipeline / February 2010
|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|