By Amy Bostock
TORONTO — The annual Canadian Hotel Investment Conference (CHIC) took place last week at the Fairmont Royal York in Toronto. More than 500 attendees from across Canada and the U.S. gathered for two days of networking and insightful panel discussions.
The program kicked off with a discussion about what the Canadian economy will look like compared to its past self and other G7 nations this year. Moderated by Rob Kumer, president & Chief Investment Officer, KingSett Capital, What a Magical Mystery Tour explored how the Canadian hotel sector compares to other real-estate classes and why hotels are fundamentally strong amidst a looming recession and shifting interest rates. Panellists included Brian Flood, executive vice-president & Practice Leader, Hospitality & Gaming Group, Canada, Cushman & Wakefield; Robin McLuskie, managing director, Hotels
Colliers Hotels; and Paul Morassutti, Chairman, CBRE Canada.
Morassutti began by looking back at 2022, which was “an interesting year. In the hotel sector, there’s been some good news and some bad news. But overwhelmingly, there’s been more good news and bad,” he said. “So, if you look at how we performed over the year, occupancy ticked up, ADR went up fairly significantly and RevPAR growth was through the roof. Operationally, we’re sitting at a fairly good place today. Clearly, the fastest run up in interest rates in trading history did not help, but because [the industry] had strong operational performance that helped to mitigate those increases in cap rates and interest rates, top line performance was extremely strong.”
McLuskie addressed hotel-transaction volume for 2019 to 2023 forecast. “Essentially, this year we’re targeting about $2-billion in transaction volume, up from $1.6 billion in 2022” she said, while showing a breakdown of which segments (i.e. mixed-use development and conversion activity). “Last year in 2022, your average deal size was $10 million, so still quite small. This year, we [predict] the average retail price is going to be up, and that’s a reflection of we’re seeing more urban assets trading. There’s been a few good trades in Montreal this year, Toronto is coming up and we’re seeing products in some of the major markets. That said, it’s still a very strong trading activity in secondary and tertiary markets, that $5 to $10 million is palpable for a lot of the private investors looking for product out there. So, I think this year we’re seeing more diverse-level trading.”
The next panel, Day (and Night) Tripper, addressed both the strong return of leisure travel and the challenges still facing the business-travel segment. Moderated by Tony Cohen, partner & executive vice-president, Crescent Hotels & Resorts/president & CEO, Global Edge Investments (GEI), CHIC’s first-ever all-female panel included Cindy Estis Green, CEO & co-founder, Kalibri Labs; Danièle Gadbois, vice-president, Global Enterprise Sales, CWT; and Ally Wesson, vice-president, Marketing, Realstar Hospitality.
“For the most part, as we’ve heard occupancies are sustaining themselves. But what are the new drivers of demand and for what segments,” asked Cohen as he introduced the session. “People are paid to attend conferences, as evidenced by today’s record numbers, but where’s the elusive business traveller?”
Other morning sessions included A Day in the Life-Top hotel successes and failures heard here, live and willingly shared!, which saw industry leaders hare stories about recent development or operational initiatives that were successful — and some that were not. Moderator Sylvia Occhiuzzi, senior vice-president, Beechwood Real Estate Advisors led this fun trip down memory lane with panellists David Donaldson, president, MasterBUILT Hotels; Jeff Hyslop, senior vice-president, Asset Management & Investment, InnVest Hotels; Farhan Kassam, president, Sterling Group Inc.; and Sky McLean, CEO & owner, Basecamp Resorts Ltd. & Big Moose Realty.
Before breaking for lunch, Bill Stone presented the inaugural CHIC Lifetime Achievement Award posthumously to Deepak Ruparell. This annual award is given in recognition of an individual who possesses extraordinary business acumen and has demonstrated remarkable long-term leadership success. Recipients are stakeholders who contribute to the overall vibrancy of the hotel industry as well as generous philanthropic efforts in the broader community.
“Deepak Ruparell was an agile, reliable and brilliant colleague, mentor, friend and visionary and networker extraordinaire in Canada’s hospitality industry,” said Stone. “He was extraordinarily productive in the hotel world, yet he was profoundly modest. He had the vision to take calculated risks, but also is very sensitive to those people around him. And his focus was always with colleagues and staff, friends, and sometimes even strangers.”
To this end, Silver Hotel Group established the Ruparell Foundation to promote philanthropy, and support organizations in both local and international communities. These efforts centered around promoting volunteerism through the guiding pillars of education, health and wellness and sustainability, which represent the core values of the Ruparell family.
“Deepak earned the respect and trust of his colleagues in every corner of the industry. He moved quickly, intuitively and intelligently,” said Stone. “He amassed knowledge and he was able to network to benefit all stakeholders. People liked to talk to him and people liked doing business with him.”
Hotel Association of Canada Update
Following lunch, Susie Grynol, president & CEO, Hotel Association of Canada, provided an update on the association’s lobbying efforts on behalf of the industry, as well as insight into the hotel landscape and what future plans HAC has in place to serve its membership. Of particular note was HAC’s successful advocacy initiatives addressing the many barriers that continue to exist for immigrants and other new entrants seeking employment in Canada’s travel, tourism, and hospitality sectors.
Next, Lyle Hall of Hall Hospitality Advisors, introduced a panel of North American Chief Development Officers will address the important issues around cogent and profitable hotel development in a bubbly inflationary period. The session, titled You can’t buy me love, but you could build me a hotel, included Chip Ohlsson, EVP & Chief Development Officer, Wyndham Hotels & Resorts; Mark Purcell senior vice-president, Development, North & Central America, Accor; Noah Silverman, Global Development Officer, U.S. & Canada, Marriott International, Inc.; and Matthew Wehling, SVP Development, U.S. & Canada, Hilton. The group discussed where the opportunities lay and what their brands are doing to attract a broad number of segments to your market.
Overall, the session had a positive vibe as the panellists shared their view of the path to recovery. “I think the industry has come back probably a little bit different than what it was before COVID,” said Purcell. “There could be some great runway in front of us.”
The final panel of the day, Tell me why!, featured leading Canadian C-Suite occupants discussing important issues facing their properties, teams and the industry as a whole and sharing insight as the sector continues to navigate its recovery.
Moderated by Zach Pendley, Real Estate and Hospitality Transactions and Valuations Lead, EY Canada, the panel included Julian Buffam, partner, New Castle Hotels & Resorts; Alnoor Gulamani, president, Bayview Hospitality Group; Reetu Gupta, Ambassadress, The Gupta Group; and Robert Pratt, president & COO, Sandman Hotel Group and Sutton Place Hotels.
Gupta set the tone with her feelings of optimism regarding the hotel industry in Canada. “I’m very optimistic. But for me, I don’t want this word ‘recovery’ because I think we’re in a period of growth. And numbers don’t lie. I agree that [a recession] could happen so the only advice I would give is brace yourself and protect yourself. You need to be agile. But I’m definitely optimistic that we’re in a period of recovery.”