Hotel Transactions, Market RevPar, Occupancy Report
Mid Year 2004
|August 2004 - As we reach the mid point of 2004 the long awaited optimism
the hotel industry has been hoping for has finally arrived. It seems that
2003 may have been the bottom of the cycle in terms of hotel performance
across the country as positive trends are emerging in most markets. The
general economic climate in is improving, the newly elected Liberal minority
government seems to have instilled confidence, and for at least the next
12-18 months, the industry looks sets for continued recovery baring any
man-made or natural disaster which could potentially deter the confidence
of the traveling public.
Hotel Investment Market
The positive trends in hotel performance is causing the hotel investment market to take a wait and see approach as property owners feel the increased performance will translate into higher property values. If this is the case, the period after the summer months may be a prime time for buying and selling as there is a significant amount of capital in the market chasing very little product with even fewer motivated vendors. The keys to the hotel investment market in the short to medium term include:
The hotel financing markets in Canada have seen an improvement in the past six months in terms of the number of financing sources. Major banks are still shying away from hotel investments unless the clients have a historic and valued relationship. However, GE Capital advised that they had placed more than $37 M in hotel debt across the country in the month of June which indicates a positive trend.
The franchise companies have been busy during this first half of the year focusing on conversions and expansions of properties. Some of the notable changes include:
The positive effect the Olympic announcement was hoped to have had on the Whistler resort market did not materialize. This winter the resort municipality’s lodging market is down 6.2% percent year-to-date through May compared to the same 5 months of 2003 that was prior to the Olympic bid announcement. Tyne will release a report in the fall detailing the effect of the Games on the hotel industry in past host cities and projections as to what Greater Vancouver might expect over the next 12 years.
In general, the markets across Western Canada have shown very positive trends through the first half of the year. The following are some of the highlights:
Tyne’s sample statistics for the first 6 months of 2004 indicate:
Across Western Canada, some cities and regions have been showing much stronger recovery trends. Some of the hot and cold markets include:
The hotel industry is beginning to experience resurgence in development proposals across Western Canada, but specifically in the hot markets discussed above. This is most likely due to the improved confidence in the industry. The following highlights some of the development information pertinent to Western Canada:
Hotel transactions during the first half of 2004 have been very quiet but the second half of the year could see more transactions if the positive trends in the industry continue. May and June were the two busiest months in the first half of the year which may indicate a positive trend.
Some of the noteworthy sales so far this year include:
Looking forward to the second half of 2004, we believe that the markets will continue to see a stronger than expected recovery with vendors holding onto properties as the markets recover or setting prices that reflect the upside potential. Capital for hotel investments continues to grow as we see interest from local hotel companies in acquiring more assets, but the key is that they all want properties in major markets such as Greater Vancouver, Kelowna, Victoria, Calgary and Edmonton.
Tyne Hospitality is a commercial real estate brokerage firm specializing in the sale of hotels and resorts in western Canada with a preference for working with buyers to acquire assets that suit their investment requirements. The following is a list of some of the current opportunities available in Western Canada, although not all of these are Tyne mandates:
This article is intended for information purposes only and should not be relied upon by recipients hereof. Tyne Hospitality Services Limited has not independently verified this information and neither guarantees nor warrants the accuracy of the information contained herein. In the event of any concerns regarding the accuracy of this information, you should take such steps as you may deem appropriate. No responsibility will be assumed by Tyne Hospitality Services Limited for any decisions based upon this information or the correctness or completeness of the representations herein. Tyne Hospitality Services Limited assumes no liability for any special, consequential, direct or indirect damages of any nature whatsoever, in connection with this information. The information contained herein may change. This brochure is protected by copyright. Any reproduction in whole or in part, without express written consent of Tyne Hospitality Services Limited is strictly prohibited.
Angus G. Wilkinson, CGA, MHCIMA
Eric S. Pateman, MHCIMA
|Also See:||Hotel Market Update in Western Canada; 3rd Qtr 2003 - Hotel Transactions, Market RevPar, Occupancy Report / Tyne Hospitality / January 2004|
|Hotel Market Update Report Western Canada 2003 / 2003 - Hotel Transactions / Tyne Hospitality / January 2004|
|Hotel Market Update in Western Canada; Hotel Transactions, Market RevPar, Occupancy Report / Tyne Hospitality / September 2003|