Canadian hotel investment market expected to recover in 2010 according to Colliers International Hotels and HLT Advisory
Bleak forecast for the 2009 summer travel season; Six in ten respondents expect a clear sign of recovery by 2010
According to the survey findings, the corporate market segment, which consists of convention, meeting and incentive trips has the least optimistic forecast with almost two-thirds (63%) of respondents expecting business activity in this sector to worsen during the remainder of the year. With the industry suffering from decreased demand for lodging accommodation, respondents cited aggressive rate discounting and new passport restrictions among the largest challenges.
“Hotels are increasingly competing by slashing rates, often initiated by one hotel forcing others to follow. Discounting is most apparent in the urban markets of Toronto, Vancouver and Montreal,” says Bill Stone, Executive Managing Director of Colliers International Hotels. “Higher gas prices and a rising Canadian dollar are also impacting travel and could cause further devastation to the summer travel season.”
The expectation of a recovery being more than six months away has had a dampening effect on hotel real estate values with less than 10 per cent of respondents predicting hotel transaction values at or above those realized in 2008. Half of respondents expect to see pricing as much as 25 per cent lower than in 2008.
“There’s no question expectations have changed in the short-term,” said Alam Pirani, Executive Managing Director of Colliers International Hotels. “However it is important to emphasize that the hotel industry has a much longer investment cycle which spans beyond one season or year.”
About the survey | Colliers International Hotels and HLT Advisory commissioned the online survey which was conducted at the end of June 2009. The survey includes responses from 325 participants representing hotel owners, managers and advisors from across Canada.
The entire survey may be obtained at
About Colliers International Hotels | Colliers International Hotels is an international real estate investment advisory company specializing in the lodging industry. Formed in 1985 to work alongside owners and investors in all aspects of managing operations, ownership and financing of investment portfolios, our knowledge and experience extends across all hotel and resort asset classes and markets.
About Colliers International | Colliers Macaulay Nicolls Inc. (CMN) operating as Colliers International is a leading global real estate services company that provides a full range of services to real estate users, owners and investors worldwide. Colliers operates in over 294 offices in 61 countries. Services include brokerage, property management, hotel investment sales and consulting, corporate services, valuation, consulting and appraisal services, mortgage banking and research. Colliers International is a worldwide affiliation of independently owned and operated companies.
About HLT Advisory Inc. | HLT Advisory Inc. provides specialized consulting and support services to the Canadian and international hospitality, leisure and tourism industries including gaming, lodging, travel/tourism, recreation, sport, entertainment and public assembly venues.
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