the stars are out

When it was built in 1929, Fairmont’s Royal York Hotel in Toronto was the tallest building in the British Empire, if you can believe there was such a time in the history of real estate. Now a new era of hotel development in Canada is upon us, and is primed to re-write our expectations of the industry. “Canadian hotel transaction activity for 2006 mirrored the global trend of increased activity in the lodging sector,” reported Colliers International Hotels’ 2007 Canadian Hotel Investment Report. “Investment in the Canadian hotel sector skyrocketed in 2006, surpassing the previous mark set in 2005 by more than $1 billion to reach aggregate transaction volume of almost $3.0 billion — the highest level ever recorded,” the report cited.

The lay of the land

One influential international lodging trend that has landed in Canada is the hybrid project — a combination of hotel and private residences in an economic model that raises capital in advance of construction through the sales of condominium suites atop the hotel. Five such projects currently vying for five-star status in Toronto are the Hazleton Hotel, the new Four Seasons Hotel and Residences, the Trump Tower, the Ritz Carlton and the Living Shangri-La.

Shangri-La, one of Asia’s popular luxury brands, chose Vancouver as its foray into the North American market, and the projects in Vancouver and Toronto were designed by James K.M. Cheng Architects and developed by Vancouver’s Westbank and the Peterson Group, with Shangri-La Hotels and Resorts managing the projects. This is not unlike a similar developer/brand deal for the Fairmont Pacific Rim hotel in Vancouver, another Cheng-designed, Westbank and Peterson project being built on “the last significant block of undeveloped land in Vancouver ” according to William Fatt, Fairmont Hotels & Resorts CEO, who sold the site to Westbank and the Peterson Group.

Other high-end Vancouver projects expected to be completed in time for the 2010 Winter Olympics include the Coast Coal Harbour Hotel from the North American office of Japan’s Oakabe and the Loden Hotel from the Kor Hotel Group.

A curious trend in this sector is the ownership of supposedly competing projects in the same geographical market. Case in point, the Fairmont Pacific Rim and Living Shangri-La in Vancouver, as well as Toronto-based Four Seasons & Resorts group, whose founder Isadore Sharp has restructured the company as private once again with support from Bill Gates’ Cascade Investments and Prince Al Waheed Bin Talal Bin Abdulazia Al Sud, whose Kingdom Hotels also owns a share of the Fairmont brand.

Design for less

The romantic history of tourism by rail in Canada once dictated where luxury hotel brands emerged. But as the Colliers report shows, the markets with the strongest supply growth are now just outside metropolitan areas, such as around the airports of Montreal, Vancouver, and Toronto, or in the urban centres of boom cities such as Edmonton and Calgary where land may be more limited. Yet the brands driving these markets are not necessarily the luxury ones who pay top dollar for high design. Companies like Quebec’s Le Groupe Germain are spearheading a change in these markets with the roll-out of its new sub-brand Alt Hotel, a “no frills chic,” less expensive version of its namesake Hotel Le Germain label, with the first project in Brossard, Quebec, and plans are to build 10 to 15 projects across Canada within the next five years.

Starwood Hotels’ W brand has also launched a cheap-chic brand of its own called ALoft, with the first two Canadian projects currently under construction in downtown Toronto, developed by Magna Hotels International, and at Montreal’s Trudeau International Airport, developed by the Silver Hotel Group. Marriott is also bringing a more contemporary-designed project to Trudeau Airport, sited on top of the Trans-border Departures area.

The “B” word

Although the design vocabulary of luxury brands in Canada (and in the world) has often meant a more traditional approach to architecture and interior decoration, this is changing thanks to boutique brands like Le Germain where size (small) and design (contemporary) matter. In its venerable hotel star-rating protocol, Mobil Travel Guide still lists crown mouldings, for example, as an important decorative element, but obviously this criteria will need to change to keep pace with the growing contemporary design lifestyle of the mid to upscale markets.

Within this market, boutique branding has become another significant trend, “but you noticed, I didn’t use the B word,” offers Shangri-La regional vice president Steven Darling during the recent launch of his company’s first project in Toronto. The term should be used and understood simply as a way of identifying projects under 100 rooms, rather than loosely tied to some kind of generic lifestyle branding aesthetic. Montreal and Toronto already boast several of these intimately scaled projects completed in the last five years: Le Germain’s Maple Leaf Square project across from the Air Canada Centre in Toronto is currently under construction, as is Freed Development’s 550 Wellington West hybrid project designed by architectsAlliance with interiors by Spain’s Studio Mariscal; designer/developer Del Terrelonge’s long awaited six-floor, 33-room Templar; and Ocho 8, 12 rooms and suites on four floors developed by Louise and Dannis Choi and designed by Toronto-based Dialogue 38.

Calgary, flush with oil money, is anticipating Sir Norman Foster’s new Bow development for EnCana, a project mayor Dave Bronconnier calls “the keystone to the redevelopment of the long struggling downtown east end,” and will encompass the nearby York Hotel, which will be converted to retail, and the Regis Hotel to be developed as a boutique project.

Does size matter? At 61 floors, Living Shangri-La will be the tallest tower in Vancouver, with the 60-storey Ritz Carlton across the street a close second, anchoring the 1100 block of West Georgia Street as the apex of the city skyline. Trump originally trumpeted it was going for broke at 72 floors (this has now been re-designed as a modest 57 storeys, but the overall height of 925 feet still makes it one of the tallest buildings in Canada) and Bazis International is proposing an 80-storey mixed use tower with a 123-room hotel component at 1 Bloor Street East. But as the nine-storey Hazelton Hotel in Toronto and other boutique projects boast their small size as their trump card, it’s not surprising to learn that service is the biggest factor in Mobil’s star designation, and even though projects build to Mobil star standards, the test will be the design of the service at the end of the day.

“With Canada just entering its growth phase, timing remains ideal to continue investing in Canadian hotels,” concludes the Colliers report. As an army of cranes building these projects reshapes the skylines of many Canadian cities, expect to see contemporary design reshape the lodging industry itself, at all price points and in all markets.

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