Vancouver outshone much of Western Canada as a destination for travellers from the U.S. and elsewhere over the past year. Throw in investors, and it’s tough to figure out who doesn’t want to spend the night – or a few million – here.
“B.C. is well above the national average,” reported Carrie Russell, a partner and managing director of valuation and advisory firm HVS Canada, in Vancouver at the recent Western Canadian Lodging Conference. “The differences between how B.C. is performing relative to Saskatchewan and Alberta are like nothing I’ve seen in the 20 years I’ve been doing this.”
With strong demand from guests and little new supply from developers, downtown Vancouver hotels are exceeding expectations for revenue growth. Average daily rates rose from $201 a night to $221 a night over the past year. They’re set to stage a further rise to $235 a night in 2017. Underpinning this are occupancies in the range of 79%. (By comparison, occupancies in Calgary and Edmonton are hovering in the mid-50s, with average room rates below $150.)
The strength of the market has investors who are seeking a safe haven for capital putting their money into the local market. Among the most notable recent trades was Oxford Properties Group’s sale of the Fairmont Vancouver Airport to InnVest REIT, a deal that officially closed in September for $90 million.
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