As the Canadian hotel industry stabilized in 2024, Vancouver stood out from the pack as the nation’s strongest hotel market.
Among major Canadian markets last year, Vancouver had the highest performance in terms of occupancy (78.2 per cent), average daily rate or ADR ($285.21), and revenue per available room or RevPAR ($223.09), according to a Tuesday report from Avison Young (Canada) Inc.
Vancouver bested other hotel markets like Calgary, Edmonton, Toronto, Ottawa and Montreal.
Despite Vancouver’s domination, Edmonton showed momentum, with the highest year-over-year growth in some performance measures. Edmonton’s occupancy grew 3.4 per cent, compared with Vancouver’s negative growth of 0.4 per cent. Edmonton’s RevPAR also grew 10.2 per cent, compared with Vancouver’s 6.6 per cent growth.
Avison Young said Tuesday there is growing demand for hotel assets, and that the volume of deals spiked last year. In 2024, major Canadian markets recorded nearly $1.3 billion in hotel transactions, a 46-per-cent increase from the previous year and an 88-per-cent surge compared with 2019.
“Despite economic headwinds, the sector demonstrated remarkable resilience, achieving its highest transaction volume since 2017 and exceeding the 10-year average of $1 billion,” said the report.
The report acknowledged that 2024’s transaction count of 56 came in below the historical average of 76.
“Provided economic trade wars don’t dramatically disrupt the industry, market performance in 2025 is expected to reflect stabilized levels through the year with moderate growth in both ADR and occupancy,” the report said.
The commercial real estate services firm flagged other variables, such as Canadian families curbing non-essential expenses such travel amid inflation. On the other hand, a declining loonie could attract leisure and corporate travel from abroad. Also, budget hotels face more challenges than luxury hotels amid a “flight to quality.”
Nonetheless, Avison Young said the overall hotel investment climate in Canada is “sound.”
“There are several willing debt and equity participants that are interested in the sector,” the report said. “As income levels normalize across a range of property types, reasonable buyers and sellers will find the best investment opportunities.”
