Hotel Construction in Ontario: Trends, Regulations, and What Developers Need to Know

Ontario’s hotel construction sector is growing and evolving — shaped by shifting tourism patterns, economic trends, brand expectations, and regulatory demands. Whether you’re a first-time developer, a seasoned hotelier, or an investor exploring opportunities in the hospitality space, understanding the real-world landscape of hotel construction in Ontario is essential to navigating the market successfully.

At FCC Builders Canada, we’ve delivered hotel builds and renovations across the province, and we’re sharing some of the key things we believe every stakeholder should know before breaking ground.

1. Demand Drivers: Who’s Building and Where?

Ontario’s hotel construction market is currently being driven by three main demand streams:

• Urban Growth and Business Travel: Cities like Toronto, Ottawa, and Hamilton continue to attract business travelers and international tourists. Demand in these regions is focused on high-density, full-service, and boutique hotels that offer amenities such as meeting spaces, lounges, and wellness facilities.

• Northern and Resource-Based Communities: Regions like Northern Ontario are seeing renewed hotel construction tied to resource extraction, infrastructure development, and growing tourism. These areas often require durable, functional accommodations that can serve both short-term workers and long-stay guests.

• Highway Corridors and Mid-Sized Towns: As domestic road travel increases, hotels located near major highways, regional airports, and tourist hubs are gaining traction. Developers are building mid-scale or limited-service hotels to serve consistent demand from pass-through traffic and regional events.

2. Key Trends in Hotel Construction

Several construction and design trends are shaping new builds in Ontario:

• Modular Construction: Off-site prefabrication is gaining traction, especially in remote areas where construction seasons are short and labour is limited. Modular hotel builds offer faster delivery, consistent quality, and easier site coordination.

• Sustainability and Energy Efficiency: With rising energy costs and evolving guest expectations, developers are focusing on high-efficiency HVAC systems, low-flow plumbing, LED lighting, and green roofs. LEED certification and carbon-neutral goals are becoming standard, especially for branded chains.

• Tech-Forward Infrastructure: Smart locks, mobile check-in, digital concierge systems, and EV charging stations are no longer niche — they’re expected. Hotels are being built with robust tech infrastructure from the outset to allow for easier upgrades down the line.

• Flexible Design: New hotels are incorporating more multi-use spaces — for example, lobbies that double as co-working spaces or meeting rooms with convertible layouts. Post-pandemic preferences also call for outdoor areas, touchless interfaces, and higher indoor air quality.

3. Regulatory Landscape in Ontario

Hotel construction in Ontario is subject to multiple layers of regulation that vary based on location and scale. Some key regulatory and compliance considerations include:

• Zoning and Site Plan Approval: Developers must ensure that the property is properly zoned for hotel use. Municipalities may require rezoning or minor variances, along with site plan approvals that address traffic flow, landscaping, parking, accessibility, and stormwater management.

• Ontario Building Code (OBC): Hotels fall under Part 3 of the OBC (buildings more than 600 m² or over 3 storeys), which includes detailed fire protection, structural, accessibility, and life safety requirements. Fire separations between rooms, elevators, emergency exits, and barrier-free design are non-negotiable.

• Accessibility for Ontarians with Disabilities Act (AODA): Hotel developers must ensure that rooms, entrances, signage, and public areas comply with accessibility regulations. This includes designated accessible rooms with roll-in showers, visual alarms, and door automation systems.

• Franchise and Brand Standards: If building under a franchise like Marriott, Hilton, or Best Western, there are strict brand standards that govern finishes, layouts, room size, technology integration, and more. These requirements can significantly impact project scope and cost.

4. Cost Considerations and Budget Trends

The cost to build a hotel in Ontario varies widely depending on location, hotel class, and scope. As of early 2025:

• Limited-Service Hotels: $180–$250 per square foot

• Mid-Scale Full-Service Hotels: $250–$350 per square foot

• Upscale/Boutique Hotels: $350–$500+ per square foot

Northern and remote regions may see added premiums due to transportation costs, limited trades availability, and seasonal construction windows. Developers should also budget for soft costs (permits, design fees, legal), FF&E (furniture, fixtures, and equipment), and potential delays due to weather, supply chain disruptions, or inspections.

5. Working with an Experienced Builder

Partnering with a builder who understands Ontario’s hotel landscape is essential. At FCC Builders Canada, we bring hands-on experience with hospitality projects across the province — from urban builds to Northern Ontario hotel construction under tight timelines and tough conditions.

We manage every stage of the project lifecycle — from pre-construction planning and permitting to design coordination, scheduling, and execution. We also understand how to navigate brand standards, local authorities, and long-term operational needs to ensure that your hotel is built to perform, not just impress.

Let’s Talk About Your Hotel Project

Whether you’re building a new hotel, expanding an existing one, or exploring a conversion opportunity, FCC Builders Canada is here to support your vision with knowledge, professionalism, and real results. Contact us today to learn more about how we can help bring your hospitality project to life — from blueprint to grand opening.