Colliers International Hotels has released the results of its annual Canadian Hotel Investor Sentiment Survey, which was conducted in late 2012 in conjunction with the Ted Rogers School of Hospitality & Tourism Management at Ryerson University. The survey covers a variety of topical investment intentions as well as provides a barometer on the financing and economic environment. Overall sentiment remains high with a variety of metrics measuring their highest reading since the survey’s inception.
Top-line Survey Highlights:
- The top three hotel investment markets for 2013 include Calgary, Edmonton and Ottawa.
- 10 per cent of investors plan to sell in the next 12 months, the highest indication over the past three years.
- Secondary/tertiary markets rose in popularity for investment (22 per cent), with primary downtown urban markets also strengthening (49 per cent).
- Investors overwhelmingly favour hotel assets in the 101–175 room range (48 per cent), however there was a noticeable increase in the 51–100 room category (37 per cent) in this year’s survey, up from 28 per cent last year.
- Limited–service hotels are currently the most favoured by investors at 37 per cent (31 per cent for full–service and 30 per cent for select–service).
- Cap rates are viewed to remain stable over the next 12 months as predicted by 58 per cent of respondents, with a further 23 per cent expecting cap rates to compress even further.
- Some 60 per cent responded fixed interest rates are now averaging between 3 per cent and 5 per cent, up significantly from 34 per cent in last year’s sentiment survey.
- The state of the Canadian economy was the most important factor in the investment decision making process, with some 28 per cent of respondents indicating this response, growing from 21 per cent in 2010 and 28 per cent in 2011.