The Resurgence of Canada’s Hotel Industry
2 min read
Following a significant downturn in 2020, the hotel industry shows signs of a strong recovery, outperforming most commercial real estate (CRE) sectors. This resurgence brings renewed optimism for the travel and tourism sector, and creates various opportunities for business owners and hospitality professionals.
By 2024, Canada’s hotel industry exceeded its pre-pandemic revenue and occupancy levels. With growth expected to continue into 2025, this reflects the ongoing recovery of the tourism sector, fuelled by an increase in travel activity, both domestically and internationally. The steady rise in occupancy rates, strong revenue projections, and growing demand demonstrate the abundant opportunities in Canada’s hotel industry.
Several factors influence this resurgence, with a key driver being the rising demand for experiences. Despite interest rates and the potential of reduced discretionary spending, the demand for leisure, corporate, and event-related travel remains strong. Taylor Swift’s record-breaking Eras Tour in Toronto and Vancouver demonstrates how powerful destination events can be for the industry, as hotels experienced a major spike in bookings and an 83% increase in revenue. Companies are also beginning to reinvest in in-person events, conferences and retreats, increasing hotel demand.
With a weaker Canadian dollar, the country is becoming a valuable destination for Americans, contributing to the increase in international travel to Canada. Another contributing factor is the tighter government regulations implemented to prevent the growth of unregulated short-term rental properties and drive travellers toward hotels, especially during peak seasons and major events.
Sustainability initiatives are also playing a role in transforming the hotel industry. Many hotels are adopting eco-friendly practices that help reduce operating costs and improve their bottom line. Additionally, dynamic pricing has become an effective tool, enabling hotels to adjust room rates in real-time based on demand, events, and other market conditions.
To meet the growing demand, over $1 billion in new investments are planned for 2025, with the expansion of domestic hotel chains and the entrance of foreign brands. Canada is expected to gain an additional 6,000 hotel rooms, with 60% in Ontario. The surge in development is attracting more interest in the hotel asset class within commercial real estate.
References
Campbell, S. (2025, January 13). “A hospitality renaissance”: Canadian hotel industry swiftly bouncing back as demand for experiences rises | Financial Post. Financial Post. https://financialpost.com/real-estate/property-post/canadian-hotel-industry-bouncing-back-demand-rises
Flood, B. (2024, November 27). InnSights Quarterly Q3 2024 hospitality Report: CA. Cushman & Wakefield. https://www.cushmanwakefield.com/en/canada/insights/innsights-quarterly
Norris, K. (2025, January 15). Essential Canadian Hotel Industry Statistics for 2025 insights. Kurt’s Copy. https://kurtscopy.com/essential-canadian-hotel-industry-statistics-for-2025-insights/
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