Hotel space is apparently in very short supply currently, I wouldn't be surprised if we see a lot of new stock come online in the next few years. There is a lot coming down the pipeline right now, too.
Mid range hotels are on the way out, but they are a dying breed globally from my understanding, at least in big cities. The problem is that the finances for mid range pricing in the downtown core just doesn't work anymore.. Its too bad we aren't seeing new mid range construction on subway lines that still gives easy access to the core.
You are aware that this site is in Toronto? (Also the site they are talking about a new lease for is the conference centre not the hotel.) (That said, the hotel is an ugly carbuncle and really should be redeveloped to open up the site and provide public access to more of lake front.I'd love for the hotel to be replaced by lushly landscaped parkland one day with beautiful arts and culture pavilions by designed leading architects.