Canadian hotel transaction dollar volume is expected to surpass $2 billion by year-end 2025, says a new Cushman & Wakefield report.

The hotel transaction market continues to demonstrate strength this year, having already reached $1.8 billion in the first nine months of the year, according to the company.

“Strong investor interest and record pricing reflect the continued confidence in the sector, supported by improvement in operating results,” the report states.

In a notable deal that closed in the third quarter, Manga Group bought a 231-room hotel in Toronto, with plans to renovate such areFas as guest suites, public spaces and the building’s facade. As was reported in the summer, Pacific Reach Properties and Dilawri Group bought Toronto’s 53-storey Ritz-Carlton, reportedly paying $1.1 million per room. Extensive renovations are planned.

Room demand in major markets has rebounded in the latter stages of 2025 following a slow start to the year. From January to September, major markets generally performed positively, said C&W. Montreal was the only market to report a decline in revenue per available room (RevPAR), mainly due to the combination of a supply surge and removal of government-contract demand in the airport submarket.

Meanwhile, hotel construction is ramping up again after years of slow growth and delayed projects, said C&W. Small, luxury hotels and inns are expanding significantly in the post-pandemic era.

“While the luxury segment of the hotel market has grown worldwide over the past two decades, the post-COVID period has demonstrated that there is demand for small-scale, luxury accommodations,” states the report.

In Canada, smaller hotel properties have grown through conversions of older assets and new developments located mainly in smaller markets.

The report was authored by Brian Flood, C&W’s hospitality and gaming practice leader.

Photo: Cushman & Wakefield