According to a new report from Colliers, seven motels changed hands in the South Okanagan last year as investment surged in Canada’s lodging industry.
The seven transactions in this region totaled $35.9 million and covered 293 rooms in Summerland, Penticton and Osoyoos. Those deals accounted for about a fifth of the 39 deals in British Columbia last year, worth $459 million.
“Private investors were the biggest buyers of hotels and resorts in the region last year,” said Russell Beaudry, senior director of hotels for Colliers and one of the authors of the Hotel Investment Report. Canadian 2022, in an email Thursday.
“These groups are patient owners with long-term investment horizons. Typically, these types of properties are purchased to reposition and improve existing operations. »
Mr. Beaudry cited the new hotel being built near the Penticton Trade and Convention Center as another example of such long-term investment in the region.
As for increased market activity in the South Okanagan, Beaudry suggested the region was somewhat isolated from the worst impacts of the pandemic.
“Leisure markets have done relatively well, and limited-service hotels and motels have been winners relative to major metropolitan areas,” he explained.
“Demand for drive-through leisure and transient travel has kept many smaller, resort-focused markets at or near pre-Covid levels. The industry is also optimistic for this summer’s peak travel season, with many operators having a good number of bookings on the books.
Colliers reported only one other hotel deal in the Okanagan in 2021. It was the 30-room Schell Motel in Vernon, which traded for $1.7 million.
Nationally, there were a total of 163 sales valued at $2 billion, down from just $400 million in 2020, as investors worked through pandemic-inspired jitters.
Colliers’ said around 40% of the properties that changed hands are for redevelopment or other uses, such as social housing.
Indeed, the largest transaction last year in this province involved the 195-room Patricia Hotel in downtown Vancouver, which BC Housing acquired for $63.8 million.
Summary of 2021 motel sales in the South Okanagan:
1. Motel Bowmont, Penticton
$4.4M, 45 rooms
2. Flamingo Motel, Penticton
$1.8M, 25 rooms
3. Spanish Villa, Penticton
$5.5M, 69 rooms
4. Richter Pass Motor Inn, Osoyoos
$4.7M, 48 rooms
5. Best Western Sunrise Inn, Osoyoos
$9M, 67 rooms
6. Westridge Motor Inn, Osoyoos
$6.9M, 33 rooms
7. La Punta Norte Guest House, Summerland
$3.6M, 6 bedrooms
Source: Colliers, Canadian Hotel Investment Report 2022.