The Canadian hotel sector continues to outperform most other major real estate asset classes in the post-pandemic era, says a new Cushman & Wakefield report.

The hotel market is poised for a record year in 2023 after revenue per available room (RevPar) jumped 21% in the third quarter from pre-COVID levels. Revenues rose although occupancy remains below the third-quarter 2019 mark.

But the outlook for growth in 2024 is more muted as the work-from-home trend, increased office vacancy, an upswing in room rates and a weaker economic outlook weigh on the sector.

Nationally, average RevPar increased 22% year-over-year in the third quarter of 2023 as demand rose 10% and the average daily rate climbed 11%.

Winnipeg saw the biggest year-over-year RevPar increase (44%), while Toronto (31%) and Montreal (29%) rounded out the top three. Ottawa and Vancouver tied for fourth with a 29% rise.

“City-centre hotels continue to recover to pre-COVID demand levels; however, the lack of new supply and tighter regulations around Airbnb will assist in demand recovery,” wrote Brian Flood, the report’s author.

Photo: Germain Hotels