The Canadian hotel transaction market continued its momentum in 2012, with $1.2 billion in sales registered for the year. According to Colliers International’s 2013 Canadian Hotel Investment Report, this surpassed 2011’s $1.1 billion, translating into the fifth strongest year for the hotel market since Colliers began recording transaction data in 1985.

Sales of lodging properties across Canada marked a third year of growth – nearly tripling in total dollar terms since the full effects of the last downturn.

Nationally, hotel values grew four per cent, following the 4.8 per cent growth seen in 2011. The most significant markets for hotel value growth were Calgary (7.8 per cent), Edmonton (5.7 per cent), Regina/Saskatoon (5.5 per cent), Toronto (5.2 per cent) and Winnipeg (4.2 per cent).

For 2013, it is predicted that the national average should outperform 2012’s results with a 4.5 per cent increase.

Calgary is forecast to be the market with the strongest growth, continuing its position from 2012 at 7.9 per cent.

Over the past 10 years, the markets with the largest annual increases were Toronto and Vancouver (both tied at 7.2 per cent annual average gains). The national average for this period was 3.8 per cent. While all markets demonstrated increase in hotel values over the past decade, Montreal rounded out as the weakest market at 1.1 per cent.

According to Colliers, there were no strategic hotel sales in 2012. Instead, there were a wide variety of transactions and a broad cross-section of buyer and seller groups, which is indicative of a balanced market.

The pace and scale of transaction flows in 2012 clearly demonstrated a healthy market, which Colliers predicts will continue through this year. This prediction is supported by low borrowing rates, the robust employment markets and the country’s beneficial exposure to key commodities that are in demand worldwide. So far this year, the first quarter transaction volume has already surpassed 2012’s record first quarter volume.