For a comprehensive review of the Canada market, click below:
HVS In-Depth Canada Hotel Valuation Index:   2025 | 2024 | 2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013

In 2025 closes in, the CANADIAN LODGING MARKET has shown tremendous resilience. Canada’s “elbows up” nationalism has enabled the hotel market to thrive despite the global geo-political disruption. As the data for year-to-date through October shows, the market has exceeded 2024 in terms of RevPAR. Canada continues to reach new peaks for market demand and is matching the record-breaking occupancy from 2018.

Hotel market occupancy is greatly influenced the addition of new supply. Historically, Canada has had an annual average increase in net inventory of about 1.0%. Through 2029, the net new supply is projected to reach almost 3.0% annually because many projects that were put on hold during the pandemic have restarted.

The growth in average daily rate (ADR) has risen sharply in recent years, as hoteliers have experienced significant cost increases and have had to offset these pressures with higher room rates. Inflation has enabled hoteliers to increase their room rates, but it has also increased their labour and operating costs, creating pressure for greater operating efficiencies. At the same time, strong demand growth and growing occupancy have resulted in compression in many markets, allowing hoteliers to push room rates.

Consequently, RevPAR growth in 2025 is projected at 4.4%. From 2026 through 2028, ADR is expected to increase at a rate greater than inflation, at 3.5% annually; however, an uptick in supply is likely to result in modest occupancy declines, moderating RevPAR growth in the near term.

This year has been marked by the trade tariffs that the US has imposed on Canada. In 2024, there was $3.6 billion in trade exchanged daily between the two countries. Moreover, Canada and the United States are each other's closest international partners—76% of Canadian domestic exports went to the US. However, the tariff tensions between the US and Canada are creating uncertainty for the future of this trade relationship. As a result, Canada is looking to expand its breadth of international trading partners to make its economy less dependent on trade with the United States.

Overall, the trade conflict with the United States does not appear to be adversely affecting the Canadian lodging market. Projections for 2025 show an increase in the national value per room to $195,214, which represents a 4.0% increase over 2024. The growth of RevPAR in the top urban markets, including Vancouver Downtown, Toronto Downtown, and Montreal Downtown, is contributing to an average increase of almost 5.0% in per-room value in these major markets over 2024.

What does 2026 hold?

The Conference Board of Canada is projecting the national GDP to grow by 0.9% in 2025. In 2026, as measures to mitigate tariffs and diversify trading partners take hold and the Bank of Canada’s interest-rate reductions have a stimulating impact, the national GDP is projected to increase by 1.9%.

In 2026, the national per-room value is expected to rise by $13,000 per room, or 6.5%, reaching $207,900. This significant growth reflects several emerging trends. After a slowdown in development in response to the pandemic, more high-quality inventory is entering the market; a notable amount of hotel inventory is also being renovated, and hotels are being increasingly recognized as compelling real estate investments. This in turn has resulted in more liquidity in the market and a competitive lending environment that is ready to support new hotel development and investment.

In our projections for 2026, the top markets for new hotel supply are Toronto Downtown with 669 new rooms, Ottawa–Gatineau with 582 rooms, and Niagara Falls with 453 rooms. This is expected to result in a projected average national occupancy rate of 66%, which is on par with 2025 despite the 2.5% increase in supply (more than 7,000 rooms), reflecting pent-up demand in the market.

Strong operating performance is fuelling transaction activity

According to the Q2 2025 Colliers Hotels Investment Report, the Canadian hotel market continues to demonstrate strong investment activity. In the first half of 2025, the transaction volume reached nearly $1 billion in sales, very similar to Q2 2024. There have been 72 hotel transactions in Canada so far this year, with the average deal size of $13.4 million. This year, Colliers is projecting $2 billion in transaction volume for the country, which is on par with 2024. There are currently more buyers than sellers in the market, making competition strong for sellers given that product availability is limited. Q3 2025 is looking positive, as some large deals have already closed. In the first half of 2025, full-service hotels accounted for 40% of hotels that sold, focussed-service hotels represented 25%, and limited-service hotels, 26%. Ontario remains the dominant market at 52% of the national transaction volume, but Alberta, British Columbia, and Quebec are becoming more attractive to investors even though supply is limited. Alberta is an attractive market, representing 18% of national transactions through Q2; British Columbia and Quebec each accounted for 10% of transactions. Calgary, Vancouver, and Montreal have also seen high-value transactions.

Several major transactions that were completed in the first half of 2025 demonstrate the health of hotel investment market. The 96-room Bisha Hotel Toronto changed hands in February 2025 for $91 million, joining Marriott’s Luxury Collection. Another significant transaction earlier in 2025 was a three-property portfolio in Newfoundland and Labrador totalling 283 rooms; the price has not been made not public, but this is significant activity for this market. Additionally, the 163-room Hampton Inn & Suites by Hilton Halifax–Dartmouth sold for $48.8 million in Q1 2025. Both Toronto and Vancouver recorded notable luxury transactions this summer: the sales of the Ritz-Carlton Toronto and the Shangri-La Vancouver each achieved a price-per-key figure in the range of $1 million.

Overall, pricing momentum was strong in the first half of 2025. Investor confidence remained high, and the national price per key among transactions averaged nearly $200,000, up 18% year-over-year.

2025 HVI highlights

The Hotel Valuation Index (HVI) is a metric used for tracking hotel values for 20 markets across Canada, including Canada as a whole. It is based on market performance and overall hotel profitability margins, as well as the current lending environment and the appetite for hotel acquisitions.

The HVI projects that the Canadian lodging market to see a 4.0% increase in hotel values by the end of 2025 in comparison to 2024, which is slightly higher than the compound annual growth of 3.5% since 2005. In our four-year projections, growth is somewhat stronger from 2026 to 2028, as the Canadian hotel industry is expected to remain resilient. Hotels are an increasingly coveted asset class within the real estate industry, particularly among first-time investors in the industry.

The Vancouver Downtown and Toronto Downtown markets have consistently held the top positions in value rankings and are projected to maintain their positions; their 2025 values per room are $713,300 and $577,800, respectively.
In 2025, there has been a number of notable changes in the rankings among the 20 markets presented owing to the uneven distribution of economic impact from tariffs and federal government project investment across Canada. Each market ranking is discussed in the respective market section.

ADR, Demand, Occupancy, RevPAR, and Supply Projections:

ADR Change
Market Demand Change
Hotel Occupancy Increase/Decrease
RevPAR Change	0.0%	0.0%	0.0%	0.0%
Market Supply Growth

Change In Value For Market: ($CAD)

Canada RevPAR Change ($CAD)

Canada RevPAR ($CAD)

For more information, please contact:

Monique Rosszell, AACI, MRICS, ISHC Senior Managing Partner, AACI, Montreal and Toronto [email protected] +1 514 776-7099 (m) +1 416 704-3883 (m)