Canada - HVS/STR Hotel Valuation Index

HVS, the world’s leading hospitality consulting and valuation firm, in collaboration with STR, is pleased to deliver the 2016 Hotel Valuation Index (HVI). For Canada, the HVI offers critical information on 18 Canadian hotel markets and the country itself, including:

  • Hotel value changes and projections through 2019
  • Intelligence on market dynamics for primary and secondary hotel markets

Each year HVS Canada’s hotel experts conduct hundreds of market studies, feasibility studies, and appraisal assignments for all types of hotels across Canada. The intelligence gathered from these engagements, combined with analysis of data on hotel performance from HVS and STR, supports the conclusions and projections presented in the annual HVI.

The HVI is an index, a statistical concept reflecting a measure of the difference in the magnitude of a group of related variables compared with a base period. As such, it is a measure of broad market trends, rather than a conclusion as to the specific value of any asset, and cannot be applied to an individual asset. A good comparison is the Consumer Price Index. While this index provides a reliable measure of the overall rate of inflation in a region, it does not indicate how the price of milk has changed at your grocery store.

In any market, the aggregate nature of the STR occupancy and average rate data limits its comparability to an individual asset. In the case of the STR data used in developing the HVI, the breadth of the sample included in the report is a material factor. The sample for each market area includes mainly branded hotels in the defined market, ranging from economy to luxury properties; limited-service to full-service operations; assets in poor to excellent condition; and a wide array of locations. The resulting data, while an excellent measure of the overall trends in the market as a whole, cannot be applied to any individual submarket or asset group, much less any one hotel. For example, the addition of new supply, or a change in the performance of an individual submarket within the broader market, can cause that submarket to have significantly different results than the market as a whole.

Numerous factors influence the value of an individual asset, including the property’s age, condition, location, amenities and services, brand, management expertise, and reputation. These factors must all be considered in the context of the hotel’s specific competitive market, including the nature, strength, and trends in demand generators; the character and competitive posture of the existing hotels; and the potential addition of any new properties. The value of any individual asset can only be concluded after a thorough investigation of all these factors. And that conclusion will invariably differ—often materially—from the index indicated by the HVI.

So how can the HVI be of use to an individual investor? Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent “big picture” data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for Canada is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions across the country.


Monique Rosszell
AACI, MRICS, ISHC
mrosszell@hvs.com
+1 (416) 686-2260

Market Value Change

Market 2016 2017 2018 2019
Calgary
Significant value decline
Stable values
Significant value increase
Stable values
Canada
Moderate value increase
Moderate value increase
Stable values
Stable values
Edmonton
Significant value decline
Stable values
Moderate value increase
Stable values
Halifax-Dartmouth
Significant value increase
Moderate value increase
Stable values
Stable values
Montreal Airport
Significant value increase
Moderate value increase
Stable values
Stable values
Montreal Downtown
Significant value increase
Moderate value increase
Moderate value increase
Stable values
New Brunswick
Significant value increase
Stable values
Stable values
Stable values
Newfoundland and Labrador
Moderate value decline
Stable values
Moderate value increase
Stable values
Niagara Falls
Significant value increase
Significant value increase
Stable values
Stable values
Ottawa-Gatineau
Moderate value increase
Significant value increase
Stable values
Stable values
Quebec City
Significant value increase
Moderate value increase
Stable values
Stable values
Regina
Stable values
Stable values
Stable values
Stable values
Saskatoon
Significant value decline
Stable values
Stable values
Stable values
Toronto Airport West
Significant value increase
Moderate value increase
Moderate value increase
Stable values
Toronto Downtown
Significant value increase
Moderate value increase
Stable values
Stable values
Vancouver Airport
Significant value increase
Moderate value increase
Moderate value increase
Stable values
Vancouver Downtown
Significant value increase
Moderate value increase
Stable values
Moderate value increase
Victoria
Significant value increase
Moderate value increase
Stable values
Stable values
Winnipeg
Moderate value increase
Moderate value increase
Moderate value increase
Stable values

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