Strong investment in the Canadian hotel industry is set to continue this year, a new report has revealed.

According to CBRE Canada’s 2018 Hotels Outlook Report, investment volume reached $3.4 billion last year, down from $4.1 billion in 2016.

However, both years were heightened by impressive merger and acquisition deals, something which hadn’t been a factor for over a decade.

When entity-level mergers and acquisition activity is excluded, the $2.3 billion of traditional volume in 2017 rivalled the prior peak set in 2015 and far exceeded the 10-year average of just $1.4 billion.

Bill Stone, executive vice president of CBRE’s Hotels Capital Markets Group welcomed the “landmark” year.

“Last year was another year of landmark hotel transactions. We saw the sale of the Sheraton Centre Hotel in Toronto for $335 million, the largest ever single hotel transaction in Canada, and Hong Kong’s Leadon Investment Inc.’s acquisition of bcIMC’s SilverBirch Hotels & Resorts portfolio for $1.1 billion, to name just two,” he said.

Stone also pointed to the new luxury pricing threshold being set with the sale of the Rosewood Hotel Georgia at $930,000 per room. He believes the major components of the Canadian hotel market are synchronized and that this positive momentum will carry on through 2018.

The CBRE expects that the increase in conferences and conventions in Canada’s larger cities will see the industry continue to flourish.

“Over the last year, Canada’s hospitality industry has benefited greatly from several factors, including low interest rates, the lower Canadian dollar, continued economic growth driving business travel, and increased domestic and international tourism,” said David Larone, senior managing director of CBRE Hotels Valuations and Advisory Group. “For 2018, we are expecting to see an increase in conference and convention activity in the country’s major metropolitan markets and these solid fundamentals will continue to support demand for hotels.”