hotel

Tourism growth propels strong hotel market: Q1

Tuesday, May 31, 2016

Canada’s low dollar continues to boost tourism growth in the country, having a positive influence on the hotel real estate market.

According to Colliers 2016 Q1 INNvestment Canada report, Canada welcomed about 18 million overnight visitors in 2015, a 7.5 per cent spike from the previous year and, for the first time in more than a decade, higher than the global 4.4 per cent international arrivals growth rate.

For this year, healthy activity is expected as hotel transactions reached $331 million during Q1. The average price per room stands at $97,900, a 23 per cent rise from Q1 2015, when excluding strategic trades. Meanwhile, full-service assets continue to lead activity and represent 50 per cent of national volume.

Public companies were the most active buyer group by volume, due to the sale of the 489-room Ottawa Marriott Hotel to InnVest REIT for $115 million, the largest sale of the quarter. Looking at deals, private investors were the most active group, acquiring 15 properties with an average deal size of $5.3 million.

From a coast to coast perspective, Eastern Canada achieved 82 per cent in volume, whereas transactions in Western Canada accounted for 18 per cent, below historical levels of approximately 50 per cent.

With the aforementioned sale of the Ottawa Marriott Hotel and seven deals in the Greater Toronto Area, Ontario remains at the top of the list for investment, with the province achieving 74 per cent of national volume in this quarter.

 

Photo: Ottawa Marriott Hotel

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