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for US Hotel Sales CANADIAN LODGING OUTLOOK
The Canadian Lodging Outlook is a joint monthly publication of Smith Travel Research and HVS International, Vancouver and Toronto, Canada . |
By: Toni Viens, MAI, HVS International - New
York
February 2004 Major Hotel Transactions the Strongest Since 1998,
Portfolio Purchases Increase, CNL Biggest Buyer of the Year, and the Hotel
del Coronado tops the charts at $383
The HVS Research Department highlights 2003 in terms of the economy, number of major transactions, portfolios, the leading buyers and top trophy sales of the year. World events, the U.S. economy and hotel sales moved in tandem during 2003. The early months of the year were marred by the pending war with Iraq, terrorist threats and world concerns related to Severe Acute Respiratory Syndrome (SARS). The economy was inching along, unemployment was at a high of 6.2% and the Gross Domestic Product, in the first quarter, was a meager 1.4%. The turning point came during the second quarter when new economic policies, coupled with the end of the combat portion of the war with Iraq, provided a stimulus to the U.S. economy. The GDP in the third quarter rose to 8.4%, the highest in 20 years. By November of 2003, the unemployment rate had dropped to 5.7%, consumer spending was strong and hotel sales rocketed forward. As can be clearly seen in the following graph, major hotel transactions (those hotels that transferred at $10 million or greater) increased dramatically in the third quarter of 2003, followed by a very strong fourth quarter. Not only did the number of major transactions increase in the last six months of 2003, so did the dollars spent on hotel transfers. The following line graph shows the step up in dollars transferred on a monthly basis, beginning with May and growing to $1.2 billion in December alone. Looking at major hotel transactions over the last 14 years, 2003 ended with a total of 188, approximately a 60% increase over the 118 major hotel transactions occurring in 2002. Only in the banner years of 1996, 1997 and 1998, when the Real Estate Investment Trusts (REITS) were in their prime, did we see more major hotel transactions occurring. Portfolios played a major role in the market in
2003. A total of 443 sales from $3 million and above were recorded by the
HVS Research Department. Of these, 203 sales or nearly 46% transferred
within a portfolio.
The largest portfolio of the year was the CNL Hospitality Corp. purchase of 57 hotels from RFS Hotel Investors at a reported price of $383 million. During the year, CNL purchased four portfolios, along with a number of individual hotels, for a total price tag of $1.6 billion. Several high profile hotels purchased by CNL were the renowned Hotel del Coronado for $383 million; the Hilton Torrey Pines for $106.5 million and the JW Marriott (formally the New Orleans Grande) for $92.5 million. Second in the top buyer category was Hospitality Property Trust which purchased 19 Candlewood Suites and 16 Staybridge Suites in three separate portfolios for a total of $340 million. Coming in third for the year was Apple Hospitality Five. The company acquired 20 hotels mostly ranging between $9 and $15 million. Total dollars transferred were $330 million and included the purchase of the Marriott Suites Las Vegas for $42.5 million. The Research Department of HVS International will
soon be publishing its annual Major Transactions Survey which will include
additional information on the major hotel transactions for 2003. A signature
feature of this report is the listing of all hotel sales above $10 million
including the hotel name, city, state, number of rooms and price per room.
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CANADIAN LODGING OUTLOOK
HVS INTERNATIONAL - CANADA
December 2003 Year-to-Date
December 2003
Year to Date |
Number
of Rooms |
Occupancy Rate 2003 | Occupancy Rate 2002 | Average Room Rate 2003 | Average Room Rate 2002 | RevPAR 2003 | RevPAR 2002 | Room Supply % Change | Room Demand % Change |
Nova Scotia Area | 1,693 | 58.9% | 59.9% | $82.80 | $84.41 | $48.77 | $50.56 | 0.5% | -1.2% |
Halifax, NS | 1,942 | 71.6% | 71.0% | $123.71 | $117.98 | $88.58 | $83.77 | 3.3% | 4.1% |
Montreal, QC | 14,988 | 63.4% | 67.0% | $121.68 | $122.55 | $77.15 | $82.11 | -0.1% | -5.5% |
Quebec City, QC | 3,170 | 61.1% | 66.8% | $133.29 | $140.42 | $81.44 | $93.80 | 0.5% | -7.9% |
Quebec Area | 3,416 | 55.2% | 57.0% | $90.31 | $89.34 | $49.85 | $50.92 | 0.0% | -3.2% |
Toronto Downtown | 11,349 | 58.6% | 67.8% | $145.34 | $166.18 | $85.17 | $112.67 | -2.0% | -15.3% |
Toronto North/East | 6,743 | 51.9% | 59.7% | $107.02 | $111.52 | $55.54 | $66.58 | 3.4% | -10.2% |
Toronto Airport/West | 6,514 | 62.2% | 65.8% | $106.80 | $111.07 | $66.43 | $73.08 | -4.7% | -9.8% |
Ottawa, ON | 6,947 | 61.9% | 63.3% | $125.63 | $126.15 | $77.76 | $79.85 | 2.0% | -0.3% |
Ontario East | 3,895 | 53.6% | 56.2% | $92.95 | $92.18 | $49.82 | $51.81 | 0.1% | -4.4% |
Ontario Southwest | 8,150 | 55.6% | 60.6% | $92.37 | $91.97 | $51.36 | $55.73 | 1.2% | -7.2% |
Ontario North | 5,648 | 47.9% | 51.2% | $86.85 | $92.77 | $41.60 | $47.50 | 0.3% | -6.2% |
Niagara Falls, ON | 7,641 | 52.1% | 58.8% | $114.81 | $124.81 | $59.82 | $73.39 | 2.4% | -9.2% |
Ontario Central | 7,921 | 57.3% | 60.6% | $97.89 | $98.72 | $56.09 | $59.82 | 3.5% | -2.2% |
Winnipeg, MB | 3,612 | 59.6% | 60.8% | $90.58 | $90.76 | $53.99 | $55.18 | 0.8% | -1.3% |
Regina/Saskatoon, SK | 3,801 | 57.5% | 60.6% | $86.88 | $84.41 | $49.96 | $51.15 | -0.9% | -5.9% |
Calgary, AB | 5,253 | 60.6% | 62.7% | $115.28 | $117.23 | $69.86 | $73.50 | 0.0% | -3.4% |
Edmonton, AB | 5,955 | 62.3% | 72.9% | $97.82 | $93.75 | $60.94 | $68.34 | 1.7% | -13.1% |
Alberta Area | 8,224 | 57.9% | 60.6% | $91.42 | $91.57 | $52.93 | $55.49 | 1.9% | -2.5% |
Mountain Regions, AB | 1,745 | 61.7% | 66.8% | $240.87 | $222.04 | $148.62 | $148.32 | -0.2% | -7.8% |
Vancouver, BC | 13,075 | 61.5% | 63.2% | $127.90 | $134.27 | $78.66 | $84.86 | 0.4% | -2.4% |
British Columbia Area | 8,788 | 51.8% | 51.6% | $116.32 | $118.96 | $60.25 | $61.38 | 1.4% | 1.7% |
Victoria, BC | 3,018 | 59.2% | 58.9% | $106.54 | $119.16 | $63.07 | $70.19 | -0.1% | 0.4% |
Provinces | |||||||||
Alberta | 21,146 | 60.1% | 64.9% | $114.40 | $113.59 | $68.75 | $73.72 | 1.3% | -6.2% |
British Columbia | 26,282 | 57.8% | 59.4% | $124.73 | $129.46 | $72.09 | $76.90 | 0.9% | -1.8% |
Manitoba | 3,998 | 59.2% | 60.5% | $89.29 | $89.53 | $52.86 | $54.17 | 1.0% | -1.1% |
New Brunswick | 3,060 | 61.0% | 62.0% | $95.43 | $94.67 | $58.21 | $58.70 | 0.7% | -0.9% |
Newfoundland | 1,521 | 66.1% | 66.3% | $109.51 | $106.45 | $72.39 | $70.58 | 0.0% | -0.3% |
Nova Scotia | 3,635 | 65.9% | 66.2% | $107.31 | $104.43 | $70.72 | $69.13 | 1.3% | 0.9% |
Northwest Territories | INS | INS | INS | INS | INS | INS | INS | INS | INS |
Ontario | 63,846 | 57.4% | 62.3% | $112.91 | $120.68 | $64.81 | $75.18 | 0.7% | -7.1% |
Prince Edward Island | 889 | 51.8% | 51.0% | $98.34 | $97.73 | $50.94 | $49.84 | 0.0% | 1.5% |
Quebec | 22,567 | 61.1% | 64.7% | $129.03 | $131.56 | $78.84 | $85.12 | 0.0% | -5.5% |
Saskatchewan | 5,005 | 55.0% | 57.0% | $81.74 | $79.10 | $44.96 | $45.09 | -0.4% | -3.9% |
Yukon Territory | 221 | INS | INS | INS | INS | INS | INS | INS | INS |
Canada | 152,170 | 55.5% | 58.7% | $105.75 | $108.36 | $58.69 | $63.61 | 0.7% | -4.8% |
The 2003 Major Transactions Survey can be purchased for $250 through Joan Raffetto of the HVS New York Office. Ms. Raffetto can be reached at 516.248.8828 extension 231 or by e-mail at [email protected]. The Research Department undertakes individual sale searches or other research requests. Please contact Carmen Barros as 407.566.1956 or [email protected] for additional information. |
Selina Lai HVS International � Canada 2120 Queen St. East, Suite 202 Toronto, ON M42 1E2 (416) 686-2260, ext 21 (416) 686-2264 FAX [email protected] www.hvsinternational.com |