Hotel construction activity in Canada at the end of the third quarter of the year remained strong, despite a tightening economy.

The latest report Hotel Construction Pipeline Report issued by industry analysts Lodging Econometrics shows that at the end of the third quarter the year, the total construction pipeline in Canada was 263 projects and 34,825 rooms. Both figures were up 2% compared to a year previous.

At the end of the quarter, there were 54 projects and 6,984 rooms under construction. Projects scheduled to start construction in the next 12 months were at 105 projects and 14,270 rooms – an increase of 24% in the number of projects and an increase of 37% in rooms, year over year. Projects in the early planning stage show a slight increase of 2%, with 104 projects and 13,571 rooms recorded.

Even with the Bank of Canada’s interest rate increases, building activity remains above pre-pandemic levels. In the third quarter, there were 20 new project announcements with 1,463 rooms.

Hotel renovations in Canada are up substantially year over year. Project counts are three times larger than they were at this time last year. At the end of the quarter, renovation totals stood at 48 projects and 5,808 rooms, and conversion at 56 projects and 6,505 rooms.

Ontario remains the most active province for pipeline projects, with 148 projects and 20,396 rooms. British Columbia (47 projects and 7,239 rooms) and Quebec (20 projects and 2,633 rooms) followed. Combined, the provinces accounted for 82% of the projects in Canada’s pipeline.

Toronto remains the most active city for hotel construction in the country, with 62 projects and 9,147 rooms. More than a quarter of the rooms in the country’s total construction pipeline are in Toronto. Vancouver (19 projects/2,694 rooms) and Montreal (15 projects/2,140 rooms) followed distantly.

In the first three quarters of 2022, Canada had 19 new hotel openings, accounting for 2,015 rooms. LE’s forecast for new hotel openings predicts another 12 hotels and 1,778 rooms will open in the last quarter of 2022, bringing the year-end total to 31 new hotel openings with 3,793 rooms, for a 1.1% room supply increase.

Next year is forecast to see another 1.1% increase in room supply with 37 new hotels and 4,036 rooms expected to open, while in 2024, analysts anticipate that 42 new hotels, accounting for 4,042 rooms, will come online.