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.
Monte Stewart serves as Content Director - Canada for Connect Commercial Real Estate.
Based in Vancouver, British Columbia, Monte provides daily news coverage of major Canadian commercial real estate markets, including Vancouver, Toronto, Montreal and Calgary. He has written about the real estate sector for various media outlets and Avison Young since the early 2000s.
In addition, he has covered sports, general news and business for several leading wire services and publications, including The Canadian Press, The Associated Press, The Calgary Herald, The Globe and Mail, Research Money, The Daily Oil Bulletin, Natural Gas World and The Toronto Star.
Monte is active in his community as a youth basketball coach and raises funds for such charitable causes as Movember.