Canada’s Hospitality Pipeline Picks Up

The Canadian hospitality sector is looking up, according to Lodging Econometrics, and the market should see modest increases in development over the next year. Hospitality development fell sharply from its 2Q08 peak, when there were 32,549 rooms in the pipeline; only 15,860 rooms were in the pipeline in 1Q11. The improving picture for the Canadian hospitality industry follow news of six consecutive quarters of sale price increases in the U.S.

Although the report projects a “slightly increasing formation" of projects in the pipeline though 2012, new hotel openings will decrease in 2011 as a result of a steady decline in the number of projects in the previous 10 quarters. Like other industries, Canada’s tenuous hospitality recovery hinges on continued recovery in the broader economy.

Other report highlights:

• Brand conversions are up as hotel owners prepare for increasing demand. In 1Q11, 25 hotels announced a flag change. 
• Canada’s five leading markets account for 47 percent of projects in the pipeline. Toronto, Canada’s most populated metropolitan area, has the most projects in the pipeline with 22. 
• Canada has the sixth largest hospitality pipeline in the world, trailing the U.S., China, India, U.K., and Brazil.