Chew's News

Niagara’s popularity as a tourism destination has grown significantly over the past three years. Tourism operators, across the board, noted a 20% increase in 2016 along with an estimated $2.2B in tourist expenditures. Now that the summer of 2017 is over, tourism operators are reporting another 10% increase, putting them on track to hit a current expenditure goal of $2.4B.

According to Niagara Falls Tourism, 12 million visitors took in the beauty of the falls and surrounding tourist attractions in 2016; a number that continues to increase meaning more expenditures on local tourism businesses. The majority of visitors still come from elsewhere in Ontario, although visitors from the United States and overseas continue to spend liberally in Niagara. Tourist diversity should be kept in mind if considering purchasing a Tourist Commercial property.

Colliers International Hotels has released its 2017 Canadian Hotel Investment Sentiment survey, which measures the thoughts and intentions of hotel investors in the Canadian market. The survey respondents consist of nearly 100 investors who currently own Canadian hotel property or are actively seeking to invest.

The sentiment survey provides insight and benchmark results into the industry. Ultimately, the survey provides an excellent snapshot of hotel investment trends, an integral industry in Niagara.

Ontario continues to be a strong market for Canadian hotel sales and investment. However, it should be noted that caution is beginning to surface in terms of investing regarding the current economic climate.

Here are some of the key takeaways from investors, as seen in the survey results:

Canada's hotel market was particularly hot in Q3 with a surge of transactions closing to boost volumes to $3.86 billion in 2016. These are record setting transaction volumes, with Q3 registering as “the highest quarterly volume for hotel real estate on record totaling $3.1 billion in asset volume.” Compare these numbers to 2015 Q3’s recording holding $1.42 billion and the market's upswing is demonstrable.

According to Colliers International Hotels, Q2 2016 Hotel INNvestment report, 2016 could be a record year for Canadian hotel transaction volumes. Sales momentum is strong and transaction volume in Niagara has already well surpassed 2015.

A proposal submitted to the town of Niagara-on-the-Lake in June, envisions two six-storey hotels and five restaurants developed on vacant lands adjacent to the Hilton Garden Inn in Niagara-on-the-Lake.

This large complex if approved, will be situated at the corner of York Road and Glendale Avenue straddling the Counsell Street cul de sac.

 With inbound travel to Canada increasing 7.8% year-over-year and an increase in Canadian domestic travel, the weak Canadian dollar has spurred a boon for the hotel industry. Niagara Falls and other tourist areas like Toronto, Montreal and Vancouver have seen large percentile increases in tourist spending and traffic. The impact of the the low loonie has also caused a rising interest from foreign investors who are now able to enter the Canadian hotel real estate market with increased purchasing power.

Below is a look at stats for the Niagara Falls hotel market over 2015 and an outlook on Canadian hotel market and sales over 2016.

Canada is one of the world’s top travel destinations with Niagara Falls representing the fourth most visited destination in the country. Tourism plays an integral role in Niagara Falls economy and hospitality properties represent some of the city's biggest employers.  

Over 2015 and 2016, the market value of the Canadian dollar has helped to drive an increase in tourism visits and spending and has created an opportune time for investor acquisition.

Niagara Falls is pointing to development charges as the reasoning behind a decade long lull in hotel development. Industry proponents have suggested that a moratorium on development charges could provide a huge incentive for hotel investment in Niagara Falls.

Development charges are often cited in Ontario as barriers to development, as seen in areas like Aurora, Halton, Milton and now in of Canada’s premier tourist destinations, Niagara Falls. In an effort to spur future development, Niagara Falls city staff have been asked to deliver a report on the possibility of a moratorium.

This week, Colliers International released its sixth annual Canadian Hotel Investment Sentiment Survey Results. The survey investigates the investment appetite of active hotel investors in reference to the Canadian hotel real estate market.

The findings show that 2016 is set to be a strong year to invest in Canada, with 44% of survey respondents indicating buying as their primary investment strategy for the year.  These findings come on the back of record-high transaction volumes in 2015.