Ontario top province for hotel investment: report

Thursday, March 7, 2019

Toronto has been displaced as the most preferred hotel investment market for 2019, states Hotel INNvestment Canada Report Q4 2018. Ontario – which excludes Toronto and Ottawa – is Canada’s most desirable market for the next 12 months. Followed by Vancouver then Other British Columbia (excluding Vancouver and Alberta Mountain Resorts).

According to the report, 2018 saw “fluid” trading in secondary/tertiary markets with a national transaction volume of $1.5 billion, down from $3.5 billion in 2017 and saw more than 130 hotels sold across Canada during the year, down from more than 150 sold the previous year. Despite lower sales and revenue, strong national demand trends continue to support Canada’s lodging sector and investors remain optimistic about the industry in 2019.

The report also revealed results from the 2019 Canadian Hotel Investor Sentiment Survey –  an annual survey that aims to address the most relevant questions impacting lodging investment decisions.

As laid out in the report, here are some of the survey’s highlights:

  • New hotel acquisitions remained the dominant investment strategy for nearly a third of those surveyed (31 per cent);
  • Primary strategy investment intentions shifted from a predominantly acquisitions focus – Fourty-one per cent reported a hold, renovate or expand strategy – the highest indication since Colliers began collecting data in 2010
  • Almost 88 per cent of survey respondents say the cost of debt has become more expensive in the past 12 months and 78 per cent indicated they expect the trend will continue in 2019;
  • When asked for the most preferred international brand for new hotel investments or developments, respondents indicated Marriott branded product as their top choice for both full-service and focused/ select-service segments.;
  • Best Western ranked as the top choice in the limited-service segment (20 per cent) followed by Hilton (16 per cent) and Choice brands families (12 per cent.)

Visit www.collierscanada.com/en/commercial-property-research/2018/hotel-innvestment-canada-report-q4-2018#.XIEz2SJKiUk to download the report.

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