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Hilton Garden Inn (Peter & Adelaide, Easton Group, 16s, P+S)

Archivist said:
Well, the Garden Inn is a done duck, but not nice news for other developments like Shangri-La and the Four Seasons. It makes me worry ... maybe one of the existing hotels could go belly up in the meantime and create some demand.

Anyone on the board in the business? What kinds of calculations must be in the heads of those planning other hotel projects?
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From a lender's perspective, we would hope that no one IS planning new projects. Shangri-La and Four Seasons are too far along to stop but also quite far out in the distance from a delivery perspective.

I think the next hotels (of any significance) to open will be the Thomson, The Ritz and the new Germain.....these are the ones that will be delivering new rooms into a very tough market and will likely put further pressure on, both, room rates and RevPar.
 
Archivist said:
Well, the Garden Inn is a done duck, but not nice news for other developments like Shangri-La and the Four Seasons. It makes me worry ... maybe one of the existing hotels could go belly up in the meantime and create some demand.

Anyone on the board in the business? What kinds of calculations must be in the heads of those planning other hotel projects?
Click to expand...

Not sure what stage those hotels are at, but if they are opening late next year or 2011 the downward slide on rate/demand should have leveled off and start picking up, so they must be optimistic looking forward. Not to mention if they are long term investors lower construction costs help mitigate the construction cost vs market value equation.

Even if one/several of the hotels go belly up, the supply still remains because, usually, the hotel will never completely shut down.

By my calculation if the hilton garden is renting rooms at $100/night, and at 50% occupancy 112rooms/night his daily revenue is $11,200 or $336,000 a month. That is no where no the amount required to service a debt load of $30MM, and pay expenses.
 
torontofcfan said:
Not sure what stage those hotels are at, but if they are opening late next year or 2011 the downward slide on rate/demand should have leveled off and start picking up, so they must be optimistic looking forward. Not to mention if they are long term investors lower construction costs help mitigate the construction cost vs market value equation.

Even if one/several of the hotels go belly up, the supply still remains because, usually, the hotel will never completely shut down.

By my calculation if the hilton garden is renting rooms at $100/night, and at 50% occupancy 112rooms/night his daily revenue is $11,200 or $336,000 a month. That is no where no the amount required to service a debt load of $30MM, and pay expenses.
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Neither Shangri-La or Four Seasons can open in 2010 or 2011 (they might not even happen in 2012) given where they are in construction.
 
TOareaFan said:
I think the next hotels (of any significance) to open will be the Thomson, The Ritz and the new Germain.....these are the ones that will be delivering new rooms into a very tough market and will likely put further pressure on, both, room rates and RevPar.
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Tough market.......I would be more worried if we here in Toronto had an over supply of hotels.:confused:
 
Automation Gallery said:
Tough market.......I would be more worried if we here in Toronto had an over supply of hotels.:confused:
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The city really needs to focus on its tourism initiatives, it has really lost focus with inadequate direction and no real leadership. Having garbage/transit strikes in the middle of the summer is detrimental to the tourism industry, people don't forget this, it takes years to recover.

Do we have an oversupply or rooms in Toronto, not in comparison to other major cities. However if we maintain current the tourism policies, we are eroding our demand and eventually create an oversupply of rooms.
 
Automation Gallery said:
Tough market.......I would be more worried if we here in Toronto had an over supply of hotels.:confused:
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The hotel business is the very definition of cyclical. Right now, it could be argued, we do have an oversupply (based on the economy and short term demand)....a couple of years ago (when the currently under construction hotels were just leaping off the drawing board) it would have been hard to argue we are in oversupply.

All I was saying is that if the current slow(er) economy continues until the Thomson, The Ritz and the new Germain open their doors...they will be entering the market at a tough time......and since they are all higher end/more expensive brands...they may struggle, for a while, to find their place in the market.
 
torontofcfan said:
The city really needs to focus on its tourism initiatives, it has really lost focus with inadequate direction and no real leadership. Having garbage/transit strikes in the middle of the summer is detrimental to the tourism industry, people don't forget this, it takes years to recover.

Do we have an oversupply or rooms in Toronto, not in comparison to other major cities. However if we maintain current the tourism policies, we are eroding our demand and eventually create an oversupply of rooms.
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I doubt, seriously, that the tourist folks planned or wanted a garbage strike....but things like strikes (and the inconvenience that go with them) are part of life in city the size of Toronto...to think they don't happen elsewhere or there is some "strategy" that avoids them forever is a bit naive.
 
The big joke about travelling in France is that you always get caught in some strike or other, but it doesn't seem to stop France from being the world's most significant tourist destination year after year.

But I agree the strike is unfortunate for Toronto and will have effects going forward.

On a larger scale, I pity locations in the world where tourism is really a huge part of the economy, because it is very cyclical, and I personally believe most cycles will be downwards in future. I think we are in a situation where you have either an economy that is in retreat (with lower energy prices), or an economy that is stronger (with higher energy prices). A strong economy with low energy prices seems less and less likely to me going forward, and that doesn't bode well for the tourism industry.
 
Archivist said:
The big joke about travelling in France is that you always get caught in some strike or other, but it doesn't seem to stop France from being the world's most significant tourist destination year after year.

But I agree the strike is unfortunate for Toronto and will have effects going forward.

On a larger scale, I pity locations in the world where tourism is really a huge part of the economy, because it is very cyclical, and I personally believe most cycles will be downwards in future. I think we are in a situation where you have either an economy that is in retreat (with lower energy prices), or an economy that is stronger (with higher energy prices). A strong economy with low energy prices seems less and less likely to me going forward, and that doesn't bode well for the tourism industry.
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Bob? If so, nice to read you once again.
 
maestro said:
Too bad. You can't really fault me for not seeing that
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Bob disappeared after Ford got elected mayor and has been MIA ever since. A shame.
 
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