A strong pace of activity in the second quarter catapulted first half volume to more than $1 billion with notable urban and resort market sales.
Following a swift rebound in 2022, Canadian hotel investment sales surpassed $300 million during the first quarter of 2023.
Colliers Hotels hasrelease the 28th edition of the Canadian Hotel Investment Report. The report provides an in-depth look at 2022 transaction activity and insights on the road to recovery for the Canadian lodging industry. Further, the report provides an outlook for the hotel investment market in 2023.
Hotel investment sales accelerated in the second half of 2022 with year-end volume pacing at approximately $1.6 billion.
Hotel investment sales saw increased momentum, reaching over $520 million in the third quarter with the year-to-date total pacing at approximately $1.1 billion.
Lodging investment picked up in Q2 which saw approximately 25 transactions totaling $375 million with a boost from a handful of full-service and portfolio trades.
A strong finish for hotel investment in Q4 pushed annual transaction volume to just under $2 billion, more than doubling that of 2020 and up 13% from 2019 levels.
Twenty months into the Covid-19 pandemic, the Canadian tourism industry is now on a glide path to normalcy. Investor sentiment for the lodging asset class continues to improve with transaction volume through Q3 reaching nearly $1.1 billion, surpassing full-year volume in 2020 and pacing close behind comparable levels of pre-Covid investment activity in 2019.
The third wave of COVID-19 infections and lockdowns materially impacted the Canadian lodging market with hotel occupancies in Canada averaging 31.3% in the second quarter, according to STR. Positively, hotel transaction activity picked up materially during the quarter with approximately 45 transactions totaling $548 million, pushing first half volume to near pre-COVID levels.
Following a decade long run of largely strong hotel market fundamentals, investment activity fell to the lowest levels since the 2009 financial crisis in 2020 as the weight of the pandemic took hold. While the year was one none of us will soon forget, national and global immunization efforts put a rebound in lodging demand on the horizon and mark the early stages of the industry’s recovery.