Home2 Suites by Hilton, the year-old focused-service brand recently announced it’s 10th hotel in the United States. But the brand is also moving northward, across the border, and into Canada. Following a recent return from Toronto, Bill Duncan, brand leader for Home2 Suites and Homewood Suites by Hilton, discussed the surge in branded hotels entering the Canadian market. In fact, Home2 Suites recently announced its first deal in Canada with the Silverbirch Group for a hotel in Edmonton, Alberta. “And there are a lot of interest and deals in the works,” he says of Canadian developers' interest in U.S. branded hotels. “They’re just really embracing it.”
Home2 Suites might have signed its first deal in Canada, but many U.S. brands have found the country to be a growth market over the last few years. Duncan’s other extended-stay brand Homewood Suites has found room to grow there as well, without some of the issues developers might have to deal with in the U.S such as tight lending and limited land space. And while branded hotels in just about every market sector—from full-service to economy to extended-stay—can be found in Canada, the country’s increasing embrace of branded hotels has opened the door for many others.
“[Branding] has not only been embraced by the local development community, but also by travelers, and the hotels—that we have—are doing really, really well,” Duncan says.
With increased connectivity between feeder markets in both Canada and the U.S., Canadian travelers are getting more used to brands. Likewise, Canada has seen an influx of independent hotels move to branding in the new world economy. “Like many other countries, Canada had a lot of independent hotels turn to branding and small regional chains turn to brands owned by some of the big players,” Duncan points out.
The Canadian market has also attracted interest from developers in the U.S. “I had an owner of domestic U.S. hotels, including Homewood Suites, who called me about Home2 Suites in Canada because they have a couple of hotels in the country, and they would like to develop a Home2 in Canada,” Duncan says. “There is a desire to go into that market.”
From Duncan’s point of view, Canada is a doubly enticing market since extended-stay is hot in Canada right now. “There’s not a lot of supply of extended-stay. It’s a relatively new concept,” Duncan says. “It’s been absolutely loved by the travelers who are discovering it and owners love the results they’ve been producing.”
In fact, Duncan says, loyalty scores among the Canadian extended-stay hotels under the Hilton umbrella have actually been higher than the same extended-stay brands in the U.S. “Performance overall seems to be stronger than the U.S. hotels, which shows that the country just loves the product—the space, the concept, and all of the value-adds.“
With an increase in cross-the-border travel and development interest, Canada is a market waiting to be filled—and branded.