A Measured Optimism for Canadian Hoteliers According to Nicole Nguyen, Senior Vice President, CBRE Canada
After several years defined by disruption, rapid change, and recovery, Canada’s hotel industry has entered a more stable phase. While challenges remain, particularly around costs and staffing, the overall outlook is steady and cautiously optimistic. Nicole Nguyen, Senior Vice President, CBRE, (the global leader in commercial real estate services and investments), describes the current environment as one where strength lies in consistency rather than acceleration.
“We are in a pretty steady state right now,” Nguyen says. “Occupancy is about as good as it gets nationally, so the story going forward really becomes about how we continue to grow rate.”
Across the country, most hotel markets are operating close to practical capacity. While individual regions may still have room for improvement, Canada as a whole has largely capped out on occupancy. That reality reframes how performance is measured. Rather than chasing additional volume, operators are focused on improving average daily rate, refining yield strategies, and protecting margins.
Over the past several years, ADR growth has settled into a three to four percent annual range. Nguyen expects that pace to continue in the near term. “Barring any major disruptions, that’s likely where we’ll sit,” she explains. “It’s not rapid growth, but it is stable, and stability is not a bad thing after what the industry has been through.”
Canada continues to benefit from its appeal as a safe, accessible destination for travelers. The country’s relative value, particularly for international and U.S. based visitors, remains a strong driver of demand. “For U.S. and international travelers, their dollar still goes farther here,” Nguyen says. “Canada continues to be viewed as a value destination, and that works in our favour.”
At the same time, performance has not been uniform across all markets. Hotels in communities tied closely to specific industries such as manufacturing, logistics, or resource-based sectors have experienced more volatility. Markets with diversified demand and strong leisure appeal have generally performed better. According to Nguyen, this divergence is likely to persist. “There will continue to be markets that feel impacts more acutely than others,” she notes. “But when you look at the country overall, the picture is still a positive one.”
Traveler behavior has also settled into more predictable patterns. Leisure demand, which surged following pandemic restrictions, has returned to a more traditional calendar. Trips are once again concentrated around holidays, weekends, and summer months. Business travel has also stabilized, though it looks different than it did several years ago.
“Corporate travel is mostly back,” Nguyen says, “but companies are much more intentional about it.” Rather than flying for a single meeting, travelers are bundling appointments and making sure there is a clear business case for being on the road. Higher airfares and rising travel costs have reinforced this shift.
One lasting change has been the shortening of booking windows. With mobile technology and real-time booking tools, travelers are comfortable making decisions closer to arrival. “I don’t need to book a room months in advance anymore,” Nguyen explains. “If I’m going to Montreal next week, I’ll just book it on my phone when I need to.”
This behavior is not limited to transient guests. Smaller meetings and events are also booking later, often holding space tentatively before committing. For hotel operators, this requires more agility and constant recalibration of inventory and pricing strategies.
While demand fundamentals are encouraging, cost pressures dominate conversations with owners and operators. Labour remains the most significant challenge. “Without a doubt, labour is the biggest pressure point,” Nguyen says. “We are a very labour intensive industry, and those costs continue to rise.”
Wages, benefits, and staffing shortages are compounded by increases across nearly every other expense category. Food, beverage, utilities, linens, and maintenance have all become more expensive. Insurance has been particularly impactful, with some properties seeing dramatic increases over the past several years. “We’ve seen insurance costs double over a five or six year period for some hotels,” Nguyen notes.
The margin squeeze is exacerbated by the fact that operating costs are rising at roughly the same pace as revenue. “When your top line is growing at three or four percent and your costs are doing the same, there isn’t a lot of wiggle room,” Nguyen explains. As a result, profitability has plateaued. Hotels are not necessarily less profitable than in recent years but pushing margins higher has become increasingly difficult.
In response, operators are looking for efficiencies wherever possible. Scale can provide advantages, particularly in areas like insurance, procurement, and supplier contracts. Nguyen points to the importance of group purchasing and consolidated buying power. “There can be very real savings found through smarter sourcing and leveraging scale,” she says.
Technology also plays a role, though Nguyen emphasizes a balanced approach. Automation and artificial intelligence can support back-of-house operations and routine guest communication, but hospitality remains fundamentally personal. “We work in a service business,” she says. “There is a point where guests still want to see a human being.”
Guest expectations vary widely by segment. Limited-service hotels have successfully adjusted service models, with reduced housekeeping and fewer amenities becoming more acceptable. In contrast, luxury guests expect the same level of service they did before, if not more. “At the luxury level, the expectation is very clear,” Nguyen says. “This is what I’m paying for, and this is what I expect.”
Purpose of travel also shapes preferences. Business travelers may prioritize speed and efficiency, while leisure travelers, especially families, value interaction and guidance. Successful operators, Nguyen explains, are those who align their service offerings with guest intent and brand promise.
Despite ongoing pressures, Nguyen is confident in the industry’s resilience. “For the moment, the industry is in an okay place,” she says. “There’s no reason to believe there’s an imminent issue. We just need to keep paying attention and working with what we’re being given.”
That steady realism underpins her optimism. Demand is consistent. Canada remains attractive. And while cost pressures are real, operators who stay disciplined, responsive, and strategic are well positioned for the years ahead. For Canadian hoteliers, this is not a period of runaway growth, but it is a moment of stability and opportunity.
About CBRE
CBRE is the world’s largest commercial real estate services and investment firm, supporting occupiers, investors, and owners across every stage of the real estate lifecycle. In Canada, CBRE provides integrated advisory, transaction, valuation, and consulting services grounded in deep market insight and proprietary data. Its Hotels Valuation and Advisory Services team specializes in hospitality, delivering market analysis, financial feasibility studies, valuations, and strategic guidance to hotel owners, operators, lenders, and investors nationwide.
Article as published in the 2026 Hotel Guide.