InterContental Hotels Group advanced plans earlier this month to build 52 new Holiday Inns throughout Canada, most of which will be flagged as the less-elaborate Holiday Inn Express. IHG now claims the largest hotel pipeline of all midscale brands in Canada.
Already having had a presence for the past half-century, Holiday Inn already has 64 full-scale hotel and resort locations throughout Canada, totaling 11,666 rooms, plus 50 Holiday Inn Express hotels totaling 5,071 rooms. Future locations will include major cities including Calgary, Edmonton, Toronto and Montreal, as well as secondary markets such as Slave Lake, Alberta; Prince Albert, Saskatchewan; and Stellarton and Truro, Nova Scotia.
The biggest preferences to location can be summed up in a single three-letter word: oil. Alberta and Saskatchewan are benefiting from record-setting prices, making those provinces somewhat more attractive for hotel development than any of the lower 48 states, according to Gopal Rao, VP of sales and marketing for IHG in Canada.
"The Canadian economy is robust right now, and the prime driver is its resources," Rao tells GlobeSt.com in a recent telephone interview. "Those markets within those provinces are our big opportunity for growth, and will continue to be for as long as commodity prices stay strong."
Canadian hotel development appears to have reached new heights, with 265 projects totaling 33,964 rooms in the pipeline as of this year's first quarter, according to Lodging Econometrics. However, Patrick Ford, president of the Portsmouth, NH-based research firm, previously informed GlobeSt.com that developers anticipate the same economic problems the US is experiencing rippling north of the border.
"Canadian developers already have some concern because the pipeline has been in a topping-out formation rather than a growth formation for the last three quarters," Ford says. He adds that American tourism into Canada is declining because of the weaker US dollar, which could soften guestroom demand going forward.
Hotel occupancy in Canada is a mixed bag lately, according to statistics compiled by HVS and Smith Travel Research. Downtown Montreal posted a gain of nearly 22% in the first week of July from a year earlier, while Ottawa was down 18% over the year and Ontario was off by 16%.
Yet the prospects for investment in branded hotels throughout Canada appear strong, according to a recent report by Jones Lang LaSalle Hotels. The report notes that Canada is vastly under-roomed among familiar flags compared to US markets.
"Backed by outstanding operating results and increased cash flows, hotel transaction levels have soared over the past few years," Kristina Paider, senior VP of research and marketing for JLL Hotels in New York City, stated in the report. "Surprisingly, the Canadian hotel market is often overlooked by investors."
Holiday Inn hotel operators in Canada are being rewarded by being the first outside the US to carry the chain's newly updated logo and signage. Rao says the new signs are a seal of approval by IHG that a hotel exemplifies the standards of its brand relaunch.
"The owners are very much in support of this relaunch," he says. "They fully recognize that brands need to stay current and fresh in consumers' minds."
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