Canada, Latin America had healthy 2022 construction pipelines

Lodging Econometrics (LE) reports that both Canada and Latin America saw growth in their respective hotel construction pipelines for 2022.

According to the Q4 2022 Hotel Construction Pipeline Trend Report for Canada by Lodging Econometrics (LE), Canada’s total construction pipeline stands at 267 projects/35,758 rooms, up 2% by projects and 1% by rooms year-over-year (YOY).

At year-end 2022, projects presently under construction in Canada stand at 52 projects/6,593 rooms. Projects scheduled to start construction in the next 12 months stand at 87 projects/12,098 rooms, a 2% increase in projects YOY and a 15% increase in rooms YOY. Projects in the early planning stage are at an all-time high with 128 projects/17,067 rooms, up 11% by projects YOY and 2% by rooms YOY.

Canada’s hotel construction pipeline should remain strong throughout 2023, despite the recent interest rate increase, as building activity and new project announcements remain above pre-pandemic levels. In the fourth quarter, Canada had 24 new project announcements with 3,122 rooms; the highest they’ve been in 13 quarters.

At year-end 2022, combined renovation and conversion projects in Canada reached a record high of 105 projects, accounting for 12,141 rooms. Renovation totals closed the fourth quarter standing at 50 projects/6,080 rooms and conversion totals are at 55 projects/6,061 rooms.

Ontario is the most active province for pipeline projects in Canada at the Q4 2022 close, with 153 projects and a record-high 20,996 rooms. Next is British Columbia with record-high project and room counts of 54 projects/8,211 rooms, and then Quebec with 18 projects/2,318 rooms. Together, these three provinces account for 84% of the projects and 88% of the rooms in Canada’s pipeline.

The top cities in Canada’s hotel construction pipeline, at the Q4 close, are Toronto, with a record project count of 65 projects/9,617 rooms. Following Toronto is Vancouver with 20 projects/3,008 rooms, then Niagara Falls with 13 projects/3,899 rooms.

The top hotel franchise company in Canada’s construction pipeline, at an all-time high, is Marriott International, with 79 projects/10,457 rooms. Hilton follows with 64 projects/7,826 rooms, then InterContinental Hotels Group (IHG) with 41 projects/4,153 rooms. These three companies claim 69% of the projects and 63% of the rooms in the total Canada construction pipeline.

The top brands in Canada’s pipeline at the Q4 close are Hilton’s upper-midscale Hampton by Hilton brands with 25 projects/2,872 rooms, Marriott’s TownePlace Suites with record high project and room counts of 20 projects/2,022 rooms, and IHG’s Holiday Inn Express with 19 projects/2,053 rooms. Other notable brands in the Canadian hotel construction pipeline are Fairfield Inn by Marriott with 19 projects/1,805 rooms, Home2 Suites by Hilton with 17 projects/1,821 rooms, and Hyatt Place with 11 projects/1,695 rooms.

Canada had 29 new hotels, accounting for 3,213 rooms open in 2022. LE’s forecast for new hotel openings in 2023 anticipates 31 hotels/3,756 rooms will open in Canada, for a 1.1% room supply increase. LE analysts forecast another 1.1% increase in room supply in 2024 with 39 hotels/4,147 rooms expected to open.

In the Latin America Construction Pipeline Trend Report from LE, analysts report that at the close of Q4 2022, the total construction pipeline stands at 536 projects/87,827 rooms.

At the end of the fourth quarter, projects currently under construction stand at 222 projects/40,270 rooms. Projects scheduled to start construction in the next 12 months are up 7% by projects and 15% by rooms, YOY, standing at 158 projects/23,753 rooms and those in the early planning stage stand at 156 projects/23,804 rooms, up 16% and 8%, respectively.

Mexico has the most projects in the pipeline at the Q4 close, with 203 projects/33,475 rooms. Brazil follows with 88 projects/14,867 rooms, and next is Peru with 27 projects/3,315 rooms. These three countries in Latin America account for 59% of the projects in the construction pipeline in the region. Following Peru is the Dominican Republic with 26 projects/5,932 rooms, and Argentina with 17 projects/1,941 rooms.

Cities in Latin America with the largest project counts in the pipeline include Mexico City, Mexico with 24 projects/3,168 rooms, Guadalajara, Mexico with 21 projects/2,687 rooms, and Cancun, Mexico with 19 projects/7,524 rooms. Lima follows with 14 projects/1,993 rooms and San Paulo with 11 projects/2,483 rooms.

The hotel franchise companies with the largest construction pipelines in Latin America at the close of the fourth quarter are Hilton with 101 projects/13,737 rooms, Marriott International with 100 projects/16,161 rooms, and Accor with 75 projects/9,595 rooms. These three franchise companies account for 51% of the projects in the total Latin America construction pipeline.

The top brands in the Latin America hotel construction pipeline at the Q4 close are Accor’s Ibis brands with 49 projects/6,152 rooms, Hilton Garden Inn with 25 projects/3,196 rooms, and Hampton by Hilton with 22 projects/2,665 rooms. These are followed by IHG’s Holiday Inn Express 16 projects /2,331 rooms and Hilton’s Curio brand with 13 projects/1,237 rooms.

Throughout 2022, Latin America opened 88 new hotels/15,091 rooms. The LE forecast for 2023 will likely see an increase to 98 new hotel openings with 19,014 rooms and in 2024, LE analysts forecast another 97 new hotels, accounting for 13,985 rooms to open in Latin America.