Tourism promoters are pitching Canada as a destination for investment returns. Several organizations recently joined forces to highlight potential opportunities in recreational, leisure and entertainment assets at MIPIM, the international gathering of property professionals occurring annually in Cannes, France.
“The level of interest in Canada from investors and media across the real estate, hospitality and mixed-use sectors at MIPIM exceeded our expectations,” reports Gracen Chungath, senior vice president, with Destination Canada, a federal Crown corporation that provides marketing, research and facilitation services for the tourism industry.
Last year, Canada’s tourism sector generated an estimated $134 billion in revenue — flowing through to roughly 265,000 businesses in 5,000 regions and communities nationwide — and those annual earnings are projected to reach $178 billion by the end of this decade. International visitors constitute a Canadian export market, with the added bonus that the goods and services they consume while in the country are tariff-free.
Foreign travellers are tapped as a lucrative customer base toward the target of doubling Canadian exports outside the United States over the next 10 years. It’s envisioned that visitors from countries other than the U.S. could pump an extra $24 to $30 billion annually into the Canadian economy by 2035, but tourism promoters identify a corresponding need for attractions and related services to complement and augment existing lures.
The 30-member Team Canada delegation to MIPIM included representatives from Vancouver, Kamloops, Winnipeg, Toronto, Ottawa, the Tahltan Nation in northwest British Columbia and the Cape Breton region of Nova Scotia seeking to forge connections with prospective investors in a range of projects that could serve the sector. That includes experiential retail, accommodations, venues for culture, entertainment and recreation, and sustainable and regenerative approaches to tourism.
“The collective approach we took at MIPIM across jurisdictions, levels of government and the public and private sectors will continue to guide this work,” Chungath says.
Timing for the up cycle
The timing could be right to capitalize on Canada’s growing share of global tourism spending and perceived bargains in its institutional grade assets. Canada was one of the worst performers in MSCI’s global property index for 2025, posting an average all-asset total return of 1.3 per cent and the fourth consecutive year of declining capital value, averaged across 2,171 assets held in 50 institutional portfolios in MSCI’s Canada property index. However, industry insiders suggest that could deliver an upside here that won’t be found so readily in markets closer to the peak of their cycles.
“If you’re an investor, do you want to go hunting now in Europe?” Ugo Bizzarri, chief executive officer of Hazelview Investments, observed earlier this winter when called upon to assess the 2025 investment results. “I’m selling Europe and buying Canada.”
Meanwhile, CBRE Canada’s 2026 survey of 47 financial institutions that collectively hold more than $200 billion worth of Canadian commercial real estate loans reveals 38 per cent are planning to increase their loan books for hotels this year and 55 per cent have expanded budgets for retail. Lenders ranked hotels (9th) and entertainment-focused retail (11th) relatively favourably among 22 asset sub-classes.
Hotel demand
Digging deeper into the survey findings in a presentation during last month’s Real Capital conference in Toronto, Joshua Sonshine, a senior vice president with CBRE Capital, noted that lenders have generally had more success fulfilling their budget intentions for hotels than other property types within the sought-after alternative assets class that are still at a more nascent scale in the market.
“Hotels have seen fundamentals improve. Financing is available, accretive and competitive, and the deal flow is much more tangible than data centres and life sciences,” he said.
Colliers Canada’s recently released 2026 Canadian hotel investment report concurs that there is “robust” availability of capital, supplied by schedule 1 banks, cooperatives and credit unions. Hotel investment companies, real estate owners/investment managers seeking portfolio diversification and non-traditional hotel developers that see promise in current hotel room shortages in some markets could all potentially be players. Nevertheless, Colliers analysts caution that foreign investors have historically preferred “large portfolio acquisitions” over one-offs and the economics of new construction may not yet be workable.
Last year saw $2.3 billion worth of transactions, a 16 per cent jump from 2024, while the average per room price of $219,000 was up 36 per cent year-over-year. In contrast to the years of pandemic fallout earlier in the decade, just 1 per cent of last year’s sales volume was due to distressed sales and just 2 per cent of transactions removed hotel stock to be converted to other uses. Both domestic and international travel are identified as drivers of demand.
“A weaker Canadian dollar and the rebound of long-haul markets, including China, continue to enhance Canada’s global value proposition,” the Colliers report states. “Resort and gateway markets — from Vancouver Island, Whistler and Alberta’s mountain regions to Toronto, Vancouver and Montreal — remain highly sought after, supported by strong air connectivity.”
Transformative retail
The upheaval that the Hudson’s Bay Company’s (HBC) bankruptcy caused for owners of super-regional malls is apparent in the Canada property index. In 2024, the sub-asset class delivered a 6.1 per cent average total return; in 2025, that plummeted to negative 0.2 per cent.
In 2024, retail was the top performer among the four asset classes monitored in the index, with an average total return of 6.5 per cent — breaking down to 0.8 per cent capital growth and 5.6 per cent income return. In 2025, retail fell to third place, behind industrial and office, while recording a 1.9 per cent average total return and suffering an average 3.6 per cent decline in capital value. A spate of regional mall sell-offs also underpins the net divestment of nearly $1.8 billion worth of retail property from the index over the course of the year.
Yet, looking to the future, those dynamics could gel with tourism promoters’ aims. Participating in a panel discussion in conjunction with the release of the 2025 investment results, Tamara Lawson, chief financial officer with QuadReal Property Group, cited her company’s success in fully leasing the ambitious, high-end redevelopment of the Oakridge Park retail centre in Vancouver.
That was to have included a space for the incumbent tenant, Hudson’s Bay Company, which has now been freed up for other retailers and uses. She speculated that other mall operators have likewise moved beyond the initial shock of the sudden vacancy to adopt an upbeat outlook on the prospect for more dynamic tenants with the potential to pull in more customers.
“Our focus is really on transformative retail,” Lawson said. “It’s no secret that Hudson’s Bay wasn’t paying a lot of rent. When it has all worked through the system, people actually talk about it as a positive.”
