The Spanish Villa Resort in Penticton was one of 39 hotels and motels in British Columbia to change hands last year.
Hotel property investors are pushing ahead with plans to buy and develop properties as they anticipate more people will travel for leisure and for business.
As severe COVID-19 cases decline, governments are removing travel restrictions and helping the hospitality sector recover from its biggest drop in business in decades, if ever.
Towards the end of the pandemic, there was renewed interest from investors to buy hotels in British Columbia, many of them in the Thompson-Okanagan region.
Data from Colliers International shows 39 hotel real estate deals in British Columbia valued at more than $1 million in 2021. This is the highest number of such deals in at least a decade.
Some owners wanted to exit the sector because it was in the midst of a recession, while other investors could foresee a rebound in the sector, according to Russell Beaudry, senior director of hotels at Colliers International.
“In the year leading up to the global pandemic, hotel owners had little reason to sell because operating performance was so strong,” he told Glacier Media.
Buyers of these hotels in 2021 spent an estimated $453 million, which was the second-highest total in the past decade.
The only recent year that investors spent more to buy hotels in British Columbia was 2015, when buyers spent $759 million. That year was an anomaly as several major hotels – the Westin Bayshore, the Westin Grand and the Fairmont Hotel Vancouver – changed hands.
Beaudry expects the increased demand for hotel real estate to continue and developers to move forward with building new supply.
The largest transaction in the Thompson-Okanagan region last year saw the Comfort Inn in Kamloops sell for $10.9 million, or $125,000 per room, to Prestige Hotel and Resorts. Hotels and motels also changed hands in Penticton, Osoyoos, Merritt and Summerland (see the full list of locations at the bottom of the article).
In addition to development companies working through the process of building new hotels, governments buy hotels to convert into social housing, and investment companies buy hotels to convert into condominium towers.
The BC government has been buying hotels and converting them into social housing since at least the 1990s, but BC Housing has been particularly active in 2021.
In Kamloops, she bought the 40-room Fortune Motel for $3.6 million and plans to convert it into supportive housing. In Vancouver, the Crown corporation spent $63.8 million on the Hotel Patricia at 403 Hastings St. E. and a nearby parking lot.
Developers have also eyed hotel sites for their redevelopment potential.
Capital (Canada) Trading Co. recently sold its iconic City Center Motor Hotel built in 1954 in Vancouver at 2111 Main St. to Nicola Wealth. No one at Nicola Wealth was available to confirm plans for the site, but real estate watchers expect the firm to redevelop the site with condominiums.
“They have a development plan – that’s for sure,” Beaudry said. “It will not be a hotel.
Meanwhile, other developers are pushing ahead with the construction of new hotels. In Kelowna, Westcorp is finally moving forward with its 33-story downtown condo hotel tower. Penticton will see a new hotel at the north end of the community near the Trade and Convention Center.
Onni Group has developed a 40-story tower in Vancouver at 1335 Howe St. that includes a 110-suite extended-stay hotel known as Level Vancouver Downtown-Howe, which opened in February.
Onni owns two other Level-branded hotels that have extended-stay units: a 133-unit one at 1388 Richards St. and a 188-unit one at 1022 Seymour St.
Of those Seymour Street units, 20 are zoned to allow overnight stays as well, and Onni is aiming to have the City of Vancouver rezone the entire property to allow overnight stays, according to the chief of staff. ‘Onni, Duncan Wlodarczak.
Onni is also planning to build a new hotel next to the future Great Northern Way-Emily Carr station along the Broadway subway, and Wlodarczak said his company is awaiting clarification from the city on guidelines for exactly what can be built. on the site.
|Hotel||Town||Dated||Rooms||Price||Price per room|
|Motel Bowmont||Penticton||March 21st||45||$4.4M||$97,800|
|Richter Pass Motel||Osoyoos||March 21st||48||$4.7M||$97,900|
|Best Western Sunrise||Osoyoos||Apr-21||67||n / A||n / A|
|Spanish Villa Resort||Penticton||Apr-21||69||$5.5M||$79,700|
|comfort hostel||Kamloops||May 21||87||$10.9M||$125,300|
|Westridge Motor Inn||Osoyoos||Jun-21||33||$2.7M||$82,800|
|Quality hostel||Merrit||21st of October||56||$1.55M||$27,700|
|La Punta Norte Guest House||summer country||Nov-21||6||$3.6M||$600,000|
Colliers’ full national report can be viewed here.