Hospitality investors are seeing strong reasons to look to Vancouver, which the Courier is calling Canada’s top hotel market, posting nation-leading occupancy levels and revenues.
Last year, British Columbia claimed a 24 percent share as national hotel transactions hit $1.4 billion, stretching an eight-year string of property sales of more than $1 billion, according to Colliers Canada’s 2015 Canadian Hotels Investment Report.
Several recent purchases in the first months of 2015 alone have crossed the $100-million mark, including January’s $168 million sale of the Delta Hotels and Resorts portfolio by the British Columbia Investment Management Corp. to Marriott International and the following month's sale of the Fairmont Hotel Vancouver to West Vancouver-based Larco Hospitality for $180 million.
Landmark sales in British Columbia last year included the Fairmont Empress Hotel in Victoria, sold to Vancouver developer Nat Bosa for $48 million, and the purchase by Innvest Real Estate Investment Trust of Vancouver’s Hyatt Regency Hotel for $140 million. When the Hyatt Regency sold in December, Carrie Russell, managing director of hotel industry analyst firm HVS International, noted "increased investor interest" in downtown Vancouver hotel properties, including sales of the Days Inn and Best Western Sands hotels to investors from China. A “good portion” of the hotel-condos in the Westin Grand hotel had reportedly been sold to a single investor, Russell added.
In terms of openings, Starwood Hotels & Resorts opened its new “green” and pet-friendly hotel, the Element Vancouver Metrotown, last week. Looking ahead, real estate investment company Bentall Kennedy is proceeding with a rezoning application that could bring a hotel on top of the existing Main Post Office in Downtown Vancouver. The city council voted last week to allow the plan to proceed.
In the first quarter of this year, downtown Vancouver hotels reportedly posted an average occupancy rate of 69.5 percent, highest among all major cities. More telling, the average RevPAR rose 17 percent to $111.13, the sharpest increase in the country. A downtown Vancouver hotel room now costs an average of $160, up nine percent from a year ago, according to industry analysts PFK Consulting Ltd.