Canada’s hotel development pipeline has grown by about 10 per cent since mid-2025 as improving results and investor demand support new projects, according to Cushman & Wakefield.

The firm’s Q2 Hospitality Innsights report, released Aug. 13, says roughly 48,000 hotel rooms are now in various stages of development nationally, based on CoStar data.

“Strong, consistent results have supported an increase in proposed hotel supply across the country,” Cushman & Wakefield said. The firm said stronger projected hotel revenues are helping new developments justify elevated construction costs.

New inventory is already reaching the market. The 223-room Moxy Ottawa Downtown opened in July as part of a 22-storey mixed-use development in the ByWard Market. The site will also eventually include 343 rental apartments.

Canadian hotels recorded a 6.5 per cent year-over-year increase in revenue per available room during the first half of 2026. Average daily rates rose 6.2 per cent to $215.41, while occupancy edged up 0.3 per cent to 63 per cent.

Rate growth was particularly strong at the higher end of the market. Luxury hotel ADR increased 9 per cent, urban hotels posted a 7.9 per cent gain and hotels with more than 500 rooms recorded the strongest ADR growth by property size at 9.9 per cent.

“The investment market remains strong as hotels continue to provide investors with growth not seen in most other asset classes,” the report said.

Cushman & Wakefield expects overall hotel transaction volume to increase in 2026 despite constrained availability. Higher-profile deals completed during the first half included InnVest Hotels’ acquisition of the 304-room Hotel Grand Pacific in Victoria and Bloom Investment Group’s purchase of the 285-room Sheraton Cavalier Calgary.

The firm said improving operating results and demand for available properties are supporting confidence in the sector heading into the second half of the year.

Pictured: Ottawa’s 223-room Moxy Downtown opened in July.