The Canadian hotel market is experiencing a steady rise in revenue and per hotel room value, with Vancouver downtown leading the charge with Canada’s top hotel value for 2015 set at $230,200 per room. That value is predicted to increase 25.3 per cent in 2016, making Canada an attractive location to invest in the hotel industry.
Although per-room values in Canada are forecast to rise overall from $114,000 in 2015 to $135,200 by 2019, there are stark regional variances, according to a recent study by HVS Toronto. Some provinces, such as Alberta and Saskatchewan, are projected to have falling values over the next four years, as the provinces’ oil-induced recessions affect revenue.
Canada’s revenue per available room (RevPAR) is set to reach a record-breaking high of $96.24 this year, up from $92.29 in 2015. Vancouver downtown will see a RevPAR growth of 13.2 per cent this year, behind only downtown Toronto. In contrast, Calgary will experience an 18.5 per cent reduction in RevPAR. The regional contrasts in the lodging industry are expected to diminish as a slow recovery in the oil sector is achieved.
Hotel transaction activity in Canada has also increased, reaching one of its highest levels since 2007. Hotel investment in Canada hit $2.2 billion in 2015, making the year only the fourth on record to surpass $2 billion. Foreign investors accounted for a significant percentage of buyers, as the low Canadian dollar value and low interest rates continue to draw in investors.
The Canadian lodging industry is projected to surpass its previous per-hotel room peak value set in 2007, by the end of 2016. Less extreme market performance differences are projected throughout the country by 2017.
