Financing is the likely reason that downtown hotel developments aren't being built, according to a St. John's city councillor.
Deputy mayor Shannie Duff told CBC News that access to cash is the challenge facing developers.
"What I hear informally is the problem is financing and it's national. Financing for hotels has been very hard to get."
Duff added the city needs the hotels to be built for its own development plans to proceed.
"We do need new hotels because they're linked to our plans to expand the convention centre."
The city has approved six downtown hotel proposals since 2008.
Duff said there should be action on some of those properties within a few months.
"There are two that are very close, according to the developers. I'm hoping that before the end of summer you are going to see some real activity on the Southwest Properties proposal for Prescott Street and the Steele Hotels proposal on Buchanan Street."
Quebec firm interested in downtown St. John's properties
A Quebec boutique-hotel chain recently took out an ad in a St. John's newspaper looking to purchase downtown properties.
Hugo Germain, the director of development for Groupe Germain, said St. John's is a natural fit for his company.
"St. John's is a very dynamic market as far as the hotel industry is concerned. [It's] producing very good numbers especially related to resources and I think our product would do extremely well there."
If all these hotels are built will there be overcapacity in the hotel market?
"Not yet," said Duff. "We need to tie into hotels that can handle conventions of up to 2000 people which is what we're looking for in terms of the expansion of the convention centre ... we don't have that number at present. What we have is under capacity."