Canadian hotel investment activity remains resilient in first half of 2025, reports Colliers

The report shows nearly $1 billion in hotel sales year-to-date by the end of the second quarter, with several transactions closing in major metropolitan areas including Toronto, Vancouver, Montreal and Ottawa.

Hamir Bansal, senior vice-president at Colliers Hotels, says confidence is driving values across the sector. “Investor confidence remains high and is fuelling robust pricing across all service segments,” he says.

Pricing and supply conditions

National average price per key is approaching $200,000, representing an 18 per cent increase compared to the same period last year. Full-service hotels record the highest average price per key at $283,000, followed by focused service at $228,000 and limited service at $110,000.

Colliers notes that competition among buyers and strong valuations are creating favourable conditions for sellers. However, limited availability of hotels for sale continues to constrain the number of deals taking place.

Regional distribution of transactions

Ontario accounts for 52 per cent of national transaction volume in the first half of 2025, with the Greater Toronto Area contributing $227 million from three hotel sales. Alberta represents 18 per cent of national volume, including a $125 million transaction in the Greater Calgary Area. British Columbia and Quebec each represent 10 per cent of total volume, led by transactions in Vancouver and Montreal respectively.

Across the country’s major markets, hotel transactions total $550 million, or nearly 60 per cent of the national total.

Selected second-quarter transactions

In April 2025, the Ottawa Embassy Hotel & Suites in Ottawa sells for $32.5 million, equating to $232,100 per key. The Maritime Inn Port Hawkesbury in Port Hawkesbury, Nova Scotia sells for $11.68 million at $157,800 per key. The Best Western Bonnyville Inn & Suites in Bonnyville, Alberta sells for $7.95 million at $85,500 per key.

In May 2025, the Best Western Plus Otonabee Inn in Peterborough, Ontario sells for $11.25 million at $110,300 per key.

In June 2025, the Best Western Plus Barrie in Barrie, Ontario sells for $15.6 million at $202,600 per key. The Holiday Inn Express & Suites Welland in Welland, Ontario sells for $19.9 million at $248,800 per key.

Other Q2 sales include the Hilton Garden Inn Montreal Airport in Montreal, the Sheraton Toronto Airport Hotel & Conference Centre in Toronto, the Inn on Prince Hotel & Conference Centre in Truro, the Best Western Plus Burnaby in Burnaby and the Delta Guelph Hotel and Conference Centre in Guelph, though sale details for these transactions are confidential.

Performance indicators and outlook

National hotel performance in Q2 2025 improves over the same period in 2024, with occupancy rising to 69.7 per cent, average daily rate increasing to $216 and revenue per available room reaching $150. These results represent gains of 0.9 per cent, 2.5 per cent and 3.4 per cent respectively.

Air passenger traffic at Canada’s eight largest airports in the first half of 2025 grows by 5.2 per cent for domestic travel compared to the same period last year. International traffic declines by 4.0 per cent, while transborder traffic increases by 3.3 per cent.

The report states that several large-scale transactions have already closed in the third quarter, surpassing the total transaction volume for the second quarter. Based on the current pipeline, Colliers forecasts that year-end hotel transaction volume will approach $2 billion, in line with 2024 levels.