Western Canada is seeing a rise in transaction activity, bolstered by a recovering energy market in Alberta.
A third quarter report on hotel investment by Colliers International shows a 27 per cent increase in per-room hotel value. The average price per room is sat at $161,200 this year. In total, national hotel investment volume hit $473 million this quarter.
Nearly $100 million in sales activity came out of Alberta.
“Hotel markets that are reliant on the energy sector have been through a difficult few years; however, the worst is now behind us. Lodging demand growth has returned and supply growth is moderating, providing the foundation for recovery,” the report states.
Alberta only saw $30 million in sales activity during the first half of 2017. In the third quarter, three boutique Edmonton hotels were sold for $65.6 million from Alberta-based property management company Westcorp to DSDL Canada Ltd.
The average deal size hit $21 million to-date this year, up 18 per cent from last year.
As Alberta begins to rebound from its energy recession, HVS Canada Vice-President Jason Wright suggests that now may be an opportune time to consider investing in energy-reliant hotel markets across Alberta and Saskatchewan.
“Financing [is] readily available and the performance of energy-driven hotel markets [is] improving,” he comments.