By Fran Hohol and Rachel Huang
Due to the benefits associated with a brand
name, hotel branding in Canada has
grown steadily over the past 3 years. From 1999 to 2002,
the total number of hotel rooms in Canada grew
by 5.5%, while the branded room inventory increased by 17.5%
from 145,500 to 170,890 rooms.
The financial restructuring of much of the
industry in general and individual assets in particular in
the mid – 90’s has led to a significant shift
in favour of branded hotels in Canada. The
lending community has also supported the bias toward branded
product. Lenders are requiring that any financing of
hotel product must be supported by an internationally recognized
brand. Currently, some lenders are even specifying
which brands, they will finance.
Today, there are over 80 hotel brands represented
in the Canadian marketplace. As depicted in the following
table, PKF has classified these brands into the following
8 service categories: Deluxe; Upscale/Luxury; Midscale with
Food & Beverage; Midscale without Food & Beverage;
Budget/Economy;
Until approximately five years ago, much
of the Canadian hotel inventory could be classified as Upscale,
Midscale or Budget/Economy. The growth of the industry
and the proliferation of brands have allowed greater segmentation
along product and service lines.
Approximately 1-in-every-2 branded hotel
rooms in Canada fall within the Midscale sector (689 hotels,
offering 79,219 guest rooms), followed by the Upscale/Luxury
sector, which represents over 27% of the branded inventory,
and the Budget/Economy sector which accounts for close to
15% of Canada’s branded inventory.
CANADA’S
BRANDED HOTEL INVENTORY, 2002 |
|
Number
of Branded Properties |
Average
Property Size (rooms) |
Number
of Branded Rooms |
% Branded
Rooms |
Deluxe |
15 |
508 |
7,616 |
4.5% |
Upscale/Luxury |
140 |
334 |
46,784 |
27.4% |
Midscale with F&B |
457 |
130 |
59,284 |
34.7% |
Midscale without
F&B |
232 |
86 |
19,935 |
11.7% |
Budget/Economy |
372 |
68 |
25,302 |
14.8% |
All-Suite |
24 |
162 |
3,899 |
2.3% |
Extended Stay |
13 |
123 |
1,597 |
0.9% |
Resort |
29 |
223 |
6,473 |
3.8% |
TOTAL |
1,282 |
133 |
170,890 |
100.0% |
Source: Pannell Kerr Forster |
