Hotel sales dollar volume in major Canadian markets rose 38% in 2023 as the sector continued to recover in the wake of the COVID-19 pandemic, says Avison Young.

Investors completed $780 million worth of transactions in 2023, the company said in a national hotels review and outlook. That total was up 17% from pre-pandemic levels.

Notable deals included the sales of the Rimrock Resort Hotel in Banff, Alta., for $170 million, or $510,500 per room; the Hazelton in Toronto for $105 million, or $1.4 million per room; and the Ottawa Marriott for $86.5 million, or $176,900 per room.

‘Despite economic challenges, including the health crisis of COVID-19, the hotel market displayed remarkable resilience, with 49 transactions occurring, mirroring the number of transactions recorded in 2022,” said Toronto-based Avison Young.

The resurgence in hotel transaction volume reflects increased demand for the asset class, the company added. The increase was accomplished despite economic pressures that included a challenging debt financing market and lingering effects of the pandemic

The sector gained from a surge in leisure travel and small local group demand surpassing pre-pandemic levels.

Growth is anticipated again in 2024, but the market may move toward more normal conditions, according to Avison Young.

“Looking ahead, this positive trend underscores the enduring appeal and resilience of the Canadian hotel market, positioning it for further growth and opportunity in the coming years,” said Avison Young in its report.

The report was produced by Avison Young’s Canadian hospitality real estate team, led by Principal Curtis Gallagher.

Photo: Germain Hotels