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Innsights
Sukhdev Toor, Manga Hotels, and a family vision for the future
FEATURE PROFILE: Feature from the FALL 2024 ISSUE of STAY Magazine
Intelligence
Cushman & Wakefield releases optimistic ‘Canadian Lodging Overview 2023’
Cushman & Wakefield has released its “Canadian Lodging Overview 2023” report. In 2023, the Canadian Hospitality market reached a significant milestone, eclipsing 2019 market occupancy finishing the year at 65.7 per cent versus 65 per cent. ADR finished the year at an impressive 21 per cent higher than 2019, accroding to analysts at Cushman & Wakefield.
Cushman & Wakefield
The Canadian Hospitality market continued its rally in 2023 with growth in room demand and average rates in all markets across the country. Following a good recovery of 35 per cent in 2021, the hotel market rebounded strongly in 2022 with RevPAR growth of 91.1 per cent. This improvement brought occupancy slightly above 2019 levels while ADR well surpassed. In 2023, we saw the pace of growth slow as the markets returned to more normalized levels, particularly later in the year. The overall increase in RevPAR was still an impressive 18.2 per cent last year.
Highlights
- On a national level, the recovery from COVID took just over three years.
- The outlook for growth continues to be positive despite a muted economic outlook and high interest rates.
- The pace of growth has slowed through the last 12 months as markets return to normalization.
- The majority of forecasters indicate revenue growth in the 4-5 per cent range this year.
- The investment market for hotels remains strong with several notable transactions occurring in the past year.
- While there is an increase of new supply in the pipeline, the expansion is modest and is much needed.
- Housing shortages have had an impact of the hotel sector as needs for student housing, social housing and refugee housing have increased.
- The impact of climate change also cannot be underestimated as floods and wildfires in the past year have displaced many across the country and created needs for temporary shelter.
- As investments, hospitality is now a favoured asset class in the post COVID period. Although the overall volume of transactions did not change, there was a significant increase in average deal size as larger assets made their way to market—many of these transactions represent opportunities to create significant value.
- As the year progresses, the impact of higher interest rates and deferred capital will provide well-capitalized investors with opportunities.
