The recently released Q2 2017 Cap Rate Report by Cushman and Wakefield revealed that the hotel sector is outstripping the performance of other commercial asset classes across Canada, with an 11.3-per-cent year-to-date growth in total room revenue nationwide as of June.
Vancouver, Montreal, and Toronto’s room revenues have seen the greatest increases, rising by 7.2 per cent, 11.4 per cent, and 11.8 per cent respectively. All three cities also had a 3.7-per-cent increase in occupancy rates in the first half of the year.
“We’ve seen a significant pick-up in room demand and in the average rates … based on the strength of the Canadian economy in general, and also the strength of tourism,” Cushman and Wakefield’s Brian Flood stated, as quoted by the Vancouver Sun.
Flood noted that the current robustness of tourism is being helped along by tailwinds from political factors, with the country’s adherence to principles of openness towards international visitors.
“We’ve seen very significant gains in tourism from the U.S. over the past three years, and more recently we’re seeing an uptick in international tourism as well,” Flood explained, adding that domestic travel has seen similar increases with Canadians opting to spend more in trips to Toronto, Montreal, and Vancouver.
Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate
If current trends are any indication, Canada’s hotel segment is now ready for intensified expansion to accommodate strong demand, according to market observers.