Canada’s hotel supply has grown more strongly in 2014 than in the previous two years, but that improvement presents about 0.8 percent growth as opposed to 0.5 percent. In any case, the supply of hotels in Canada is growing at a little more than half the rate of their counter-parts in the U.S., and the drag is starting to show in the business travel community.
“The biggest hurdles developers have are the financing, and our banks are much more conservative,” HVS Toronto managing director Monique Rosszell said at a trade event in September. “This causes barriers to entry.”
Resource based markets drive hotel development in Canada, especially in Alberta which will house about 1/3 of all new hotel rooms nationally in 2017.
“That new supply will push up the average rate, because these are new, quality hotel rooms that require a certain level of rate,” Rosszell said. “There will be much more flexibility in negotiating, because hoteliers are trying to deal with the new supply coming in, but despite this, they’ll continue to push the average rate.”