Market Report
Southwestern Ontario Hospitality Market Report
2026 Investment Forecast
Elevated Construction and Tariff
Risks Temper 2026 Hotel Prospects
Less corporate travel to test upcoming supply. Southwestern Ontario’s hotel sector is poised for another year of correction in 2026 following a robust post-pandemic recovery. Regional occupancy is forecast to decline, reflecting an ongoing moderation in demand amid trade-related uncertainties and rising supply. The region’s hotel pipeline remains elevated — projects under construction account for 3.0 per cent of existing inventory, compared with the national level of 2.0 per cent. Meanwhile, overall room stock has expanded at a faster rate than the national measure over the past three years. This influx of new supply is expected to weigh on near-term performance, particularly as industrial and manufacturing activity softens under U.S. tariff pressure on steel and automotives. These trade frictions could dampen corporate travel and project-related stays, especially in manufacturing-heavy submarkets. Meanwhile, given Southwestern Ontario’s proximity to the U.S., trade disputes are also limiting cross-border visitors, further tempering demand. Despite these factors, average daily rates are projected to edge up, supported by higher-quality new builds and operators maintaining pricing discipline.
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