TORONTO — The 10th edition of Colliers International Hotels’ Canadian Hotel Investment Sentiment Survey indicates The Canadian hotel real-estate market had another active year in 2019 with preliminary transaction-volume data coming in at nearly $1.75 billion across the country — up 16 per cent from 2018.
The Q4 2019 INNvestment Canada Report also notes that, while Canada’s largest cities continue to attract interest, there’s been increasing activity in secondary and tertiary markets as investors pursue higher yields and new investment opportunities. Overall, the market continues to be supported by a diverse buyer pool with a strong appetite to buy, healthy operating fundamentals, broad availability of debt capital and confidence in the macro environment.
In terms of investment strategies, close to 45 per cent of respondents indicated their primary investment strategy for 2020 is to focus on new acquisitions (up from roughly 30 per cent in 2019). Hold, renovate or expand was the next most selected strategy, with 37 per cent indicating this as their focus. Approximately 16 per cent of investors plan to focus on building in 2020, while just two per cent plan to divest assets — marking the lowest level on record.
Looking ahead, approximately 57 per cent of investors are positive or somewhat positive about the Canadian lodging market over the next three to five years. The report notes the rate of positive outlook has remained relatively unchanged over the last 10 years.
The state of the economy and availability remain the most pressing factors impacting investment decisions, ranking as the top influences by almost 90 per cent of investors. Other factors include energy/resource prices, political environment and exchange rates/currency trends.