VANCOUVER - Great Canadian Gaming Corp. (TSX:GC) is adding its name to the list of hotel companies planning an expansion in the Vancouver area prior to the 2010 Winter Olympic Games.

The company, Canada's largest casino operator, said Wednesday it plans to cash in on the tourism frenzy in the area by developing a new five-storey, 191-room hotel at the River Rock Casino Resort in Richmond, B.C., at cost of $118 million.

The development is in addition to the hotel's existing 222 rooms, and will also include extra parking, as well as retail and office space.

The project, already under construction, is expected to be complete by late 2009 or early 2010, just in time for the Olympics, which takes place from Feb. 12 to 28, 2010.

"By both increasing the number of hotel rooms at River Rock and upgrading its amenities and retail offerings, we will further establish the property as a destination resort,'' chairman and CEO Ross McLeod said Wednesday.

Other hotels being built in Vancouver in the runup to the Olympics include; the Shangri-La, a 119-room hotel that will occupy the first 15 floors of a new 61-story building, the tallest in Vancouver; The Fairmont Pacific Rim, a 47-storey hotel with 415 rooms and 173 residential condominiums; the 19-storey, 220-room Coal Harbour Coast Hotel; the 300-room newly renovated Hotel Georgia and the 77-room Loden Vancouver hotel.

Great Canadian Gaming's plans come as competitor Gateway Casinos Income Fund (TSX:GCI.UN) is set to open a 200-room Delta-managed hotel and convention centre in Burnaby, B.C., later this summer.

The organizing committee for the 2010 Olympics estimates about 16,000 rooms will be needed in the Vancouver area for the Games. The Greater Vancouver area is estimated to have about 23,000 hotel rooms.

James Chase, chief executive of the British Columbia Hotel Association, says both private and public money is driving the industry.

"There has been a tremendous attraction from capital markets to hotels as a form of investment, which has opened up new development,'' Chase said.

Last year alone, pension fund British Columbia Investment Management Corp. bought Canadian Hotel Income Properties REIT, which owns and manages 32 hotels under the Delta, Radisson, Marriott and Hilton brands.

As well, an investment group led by the Caisse de depot et placement du Quebec, Canada's largest pension fund, struck a $2.5-billion deal to buy Legacy Hotels Real Estate Investment Trust, the country's largest hotel trust and operator of luxury Fairmont and Delta hotels.

Chase said all economic indicators show Vancouver's commercial real estate market will remain hot for years to come, due largely to the Olympics.

"The exposure is going to be unprecedented,'' Chase said.

Rick Antonson, president and chief executive of Tourism Vancouver said what's important about the hotel development now underway in the city is that nobody is building for a two-week event only.

"All of this is in anticipation of the business boom that is already happening because we are hosting the Olympics,'' Antonson said.

Tourism officials say the billions of dollars in spending on the Olympics on everything from infrastructure, housing and hotels to entertainment and security will create thousands of jobs, but also sow the seeds for expanded tourism in future from all parts of Canada and the world.

That will benefit companies such as Great Canadian, which already operates across the country, with 14 casinos, five horse racing tracks, a community gaming centre, a hotel, two show theatres, and food and beverage facilities in B.C., Ontario, Nova Scotia and Washington state.

Howard Blank, vice-president of media and entertainment at Great Canadian Gaming, said current occupancy rates at the River Rock hotel prove there is already demand for more hotel space on site.

"This is a very easy decision for us, it makes business sense,'' Blank said in an interview, adding the hotel is booked most weekends, and has an occupancy rate "in the respectable 70 per cent'' range weekdays.

Great Canadian Gaming says it will also apply to the British Columbia Lottery Corporation to recover some or all of the costs over time, as is allowed under a special lottery corporation policy.

Andy Nasr, an analyst with Raymond James Capital, calls Great Canadian Gaming's hotel project "a good move.''

With occupancy at the company's current hotel at 81 per cent last quarter, Nasr believes there is room for expansion.

Another advantage is that the expanded hotel will be the first stop from the airport on a new light-rail transit route to downtown Vancouver, known as the Canada Line, currently under construction.

The hotel could also drive additional casino revenue, said Nasr, who currently has a buy recommendation on the stock at a 12-month price target of $17.

"I think it's going to have a positive impact, but modestly accretive,'' he said, adding the real benefit, which is more difficult to quantify, will come from customers at the casino.

Shares in the gaming and entertainment operator closed down six cents at $13.21 on the Toronto Stock Exchange Wednesday.

Great Canadian, which currently employs 5,500 people, generated revenues of nearly $390 million but lost $18.6 million in 2006.