Canada’s Hotel Development Reaches Record High

Canada’s hotel development pipeline is experiencing unprecedented growth, according to the latest data from Lodging Econometrics (LE) from Q3 2024. The total pipeline has reached an all-time high of 327 projects, equating to 40,799 rooms. These represent year-over-year growth rates of 19% in projects and 8% in rooms, indicative of solid developer confidence.

Notably, the number of projects currently under construction has surged by 45%, with 81 active projects (10,596 rooms). This represents a 29% increase in rooms year-over-year. Meanwhile, the early planning phase has seen significant growth, with 177 projects (20,435 rooms), an increase of 50% in projects. However, the growth in room numbers was only 14%, suggesting a shift towards smaller-scale developments. Additionally, 69 projects (9,768 rooms) are scheduled to commence construction within the next 12 months.

In terms of scale, upper midscale hotels top the pipeline with record numbers – 135 projects (14,219 rooms), or 41% of the total projects and 35% of total rooms. Upscale chain scale follows with 56 projects (7,748 rooms), while mid-scale and upper upscale chain scales have also reached new highs with 43 projects (3,718 rooms) and 22 projects (5,066 rooms) respectively.

Provincially, Ontario leads in hotel construction, accounting for 59% of projects and 61% of rooms, with 193 projects/24,697 rooms. British Columbia follows with 60 projects/8,420 rooms, with Quebec and Alberta trailing behind.

Toronto leads in city-wise construction with 67 projects and 9,468 rooms, accounting for 23% of all rooms in Canada’s total construction pipeline. Vancouver, Niagara Falls, Montreal, and Ottawa-Hull follow, with each city also seeing significant development activity.

In the first three quarters of 2024, Canada opened nine new hotels, adding 1,004 rooms to the supply of operating hotels. LE forecasts that another 12 hotels (1,359 rooms) will open by year-end 2024, bringing Canada’s total year-end hotel opening count to 21 hotels (2,363 rooms). In 2025, LE predicts the opening of another 35 hotels (3,875 rooms), which will increase Canada’s supply totals by 1.1%. Scheduled new hotel openings for 2026 are anticipated to be 44 hotels, adding another 5,079 rooms, a 1.4% increase in supply.