Canada -  Toronto Downtown

TORONTO DOWNTOWN has one of the fastest-growing economies in Canada, driven by the financial services industry, the information and communication technology sector, and life sciences. The construction industry has boosted the local economy, particularly since a number of major infrastructure and development projects have been taking place, including The One, which at 85 storeys will be Canada’s tallest structure when it is completed. Toronto is also the country’s largest and most-visited city. Toronto is particularly attractive to US tourists thanks to the low Canadian dollar and a two-year alliance with New York City aimed at boosting reciprocal travel by sharing marketing tools and discounting flights. The increase in direct air capacity has also spurred a rise in international visitation. According to the Conference Board of Canada, the city’s GDP is set to grow 2.4% in 2018.

In 2018, the Hotel X opened with 404 rooms, counterbalancing the loss of 346 rooms from the Park Hyatt, which closed for renovation; this property is expected to re-open in 2019 with a smaller room count of 220. Over the projection period, six new hotels will open in the market, including the Canopy by Hilton Toronto Yorkville, the Ace Hotel, and the Hilton Toronto North York, representing 1,013 new rooms in total. Even with this new supply, the market will continue to operate at a high occupancy level, creating many periods when demand cannot be accommodated. This compression is putting upward pressure on room rates. The market-wide ADR is projected to increase by 8.0% in 2018 and 5.0% each year thereafter through to 2021. The RevPAR is projected to exceed the $200 mark for the first time next year.

In this dynamic context, the value per key is projected to increase by 22.9% this year, following two consecutive years of growth above 20%. Double-digit value growth is projected for each year through 2021. The value per key is projected to increase from $353,129 in 2018 to $519,843 in 2021. By 2021, the index is projected to surpass 5, meaning that a hotel room in Toronto Downtown will be worth five times as much as a hotel room in Canada was worth in 2005. Toronto Downtown is projected to have one of the highest per-room values in the country, close to that of the Vancouver Downtown market. These high values are driven principally by the high cost and scarcity of available land.

Change In Value For Market: ($CAD)

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Toronto Downtown RevPAR Change ($CAD)

Toronto Downtown RevPAR ($CAD)

Year RevPAR
2006 $118.15
2007 $120.68
2008 $121.00
2009 $99.28
2010 $116.45
2011 $116.16
2012 $119.29
2013 $124.94
2014 $131.24
2015 $141.27
2016 $164.33
2017 $179.51
2018 (f) $197.37
2019 (f) $209.22
2020 (f) $223.43
2021 (f) $235.85

For more information, please contact:

Monique Rosszell, AACI, MRICS, ISHC
[email protected]
  • +1 416 686-2260 (w)