Hotel consolidation seen as key to battling Airbnb

Accommodation-sharing platforms such as Airbnb will likely lead to more hotel consolidation, said Robin McLuskie, Colliers International‘s vice-president of hotels.

Colliers Hotel Report 2016“I definitely think we will . . . . Just to fight back against these Airbnbs,” said McLuskie. “People are seeing that it is a commodity and they want to consolidate and try and control more” room inventory.

“Industry disruptors” such as Airbnb are cited in Colliers International’s 2016 Canadian Hotel Investment Report as one of five key themes driving the Canadian hotel market in 2015 and beyond.

The report said it is “yet to be determined” what long-term impact the likes of Airbnb will have on traditional hotel performance. Owners in secondary and tertiary markets may face less of a threat.

The main issue for established industry players is they have little data regarding the current strength and growth rates of the online accommodation sites.

“They don’t publish anything so you are not able to properly track what kind of impact they are having on the industry,” McLuskie said.

(This article is part 2 of Hotel sector to stay hot in 2016: Colliers, April 14, 2016)

The other four major factors

In addition to “industry disruptors”, the Colliers report identified four other key themes affecting the Canadian hotel market:

• “Excellent investment opportunities” continue for a range of buyers. Institutions are focused on urban, full-service assets in core markets for longer term and private investors and hotel investment companies are also targeting Canada’s top markets and are less risk adverse to investing in smaller markets;

• Portfolio diversity a driver. Colliers surveyed hotel players and found a heightened desire for properties in multiple markets and regions. Just don’t expect a slew of sales in Alberta’s depressed market, said McLuskie, as owners are expected to hang onto properties and wait for an oil price rebound;

• Low loonie a plus for investors and operators. Canada’s weak buck will mean more interest from foreign buyers looking for bargains and for operators who will benefit from both more out-of-country visitors and more currency- shocked Canadians staying within our borders;

• Further operational improvements are coming to top-line results while there is plenty of room to improve the bottom line. Many hotel players believe there is still more room to increase rates while they are continuously evaluating their cost structure including key items such as labour, property taxes and other operating expenses in order to improve profitability.


Paul is a writer, editor and media trainer based in Toronto with over 25 years of experience as a business reporter. He has written for Canada’s major news services on…

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Paul is a writer, editor and media trainer based in Toronto with over 25 years of experience as a business reporter. He has written for Canada’s major news services on…

Read more





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