The ambitious goal to build up to 20 new hotels and add 2,000 new rooms to the region over the next decade is gaining momentum with municipalities, First Nations and developers, says the chief executive of Destination Greater Victoria.

Paul Nursey said that as new residential builds wane and the price of land stabilizes, the hotel space is emerging as a “generational opportunity” to address a 25% decline in rooms since 2016 and refresh the hotel landscape to remain competitive in the global tourism industry.

The tourism marketing group assembled a working group of five municipalities, industry partners, builders and the Songhees First Nation last year to work together to bring more hotels to the planning phases.

In 2025, hotel occupancy was at nearly 80% over the entire year and at one point during the summer, reached 94%.

This season is shaping up to be the same or even better, said Nursey.

The region has about 4,500 hotel rooms, but needs more after losing properties for social housing during the pandemic and redevelopment.

The working group issued its first report this week with recommendations for local governments to kick-start new hotel plans by identifying potential sites and zoning, addressing complex permit processes, pursuing First Nations partnerships and supporting the renewal and expansion of existing hotels.

The report notes that existing hotels are aging, with more than half built before 1975 and requiring significant renovations or replacement.

Managers and chief administrative officers from Victoria, Colwood, Saanich, View Royal and Sooke are part of the working group and are taking the lead, said Nursey.

“The municipal partners are really rolling up their sleeves. They are taking this seriously,” Nursey said.

“They see a sense of opportunity and a diversification of their tax base.”

View Royal, for example, doesn’t have a hotel and wants one to attract a slice of the annual visitor pie.

Colwood has recently approved two sites for hotels in the Royal Beach development along its waterfront. Sooke wants more hotels that highlight its waterfront and serve as a gateway to the trail system west of the town.

Jocelyn Jenkins, manager for the City of Victoria, said the city is “happy to collaborate” with the working group on future hotel projects, adding the tourism economy is essential for businesses, the city and the conference centre it owns.

Aryze Developments director Chris Quigley said interest in the hotel sector is gaining strength among developers. The company recently partnered with Victoria software developer Redbrick, which purchased the old Plaza Hotel property in downtown Victoria, to build a new hotel on the property.

He said the working group sets out a road map for companies to “navigate the permitting system and unlock projects” that will strengthen the local economy.

“With several hotel projects in our pipeline, we’re committed to working with local government and our business partners to make a new hotel development in Victoria a reality,” said Quigley.

Recent statistics show hotel demand is on the rise. Greater Victoria showed a jump in average daily room rates — a metric considered a key indicator of the health of the industry — from $200 a night in 2024 to $224 last year. Conferences increased by 20%, and arrivals at Victoria International Airport saw a 5% lift.

In a recent hotel investment report, Colliers said the hotel asset class has seen a surge of activity nationally, with more than $2.2 billion in hotel transactions in 2025, an 11% increase over the previous year. The report cited the strength of domestic tourism and improved international inbound travel, both expected to increase in 2026.

Municipal leaders identified several types of possible new hotels for the region.

Outside of the need for full-service hotels in the downtown core, the group said there could be more affordable mid-scale hotels for sports tournaments and cultural events, boutique hotels connecting visitors to bike and hiking trails and transportation hubs, extended-stay hotels for major employment hubs like the naval base in Esquimalt and Victoria General Hospital in View Royal, and mixed-use developments that pair hotel and residential uses.

The report said 2,000 new hotel rooms would generate more than $100 million in annual visitor spending, 1,180 direct jobs in hotel operations and 1,580 indirect jobs supporting operations.

The 130-room TownPlace Suites by Marriott recently opened at Victoria International Airport, and the same brand is opening a 103-unit, six-storey hotel in Langford next spring.

The first new hotel in Victoria in nearly two decades is under construction on Broad Street. The 167-room Hyatt-branded hotel is expected to open in 2028 at Broad and Johnson streets on the historic Duck’s Building property, preserving the 1890s-era facade and back wall.

Reliance Properties recently submitted new plans to the city for its project at 780 Blanshard St., the former B.C. Power Commission building.

The new plans call for the rehabilitation of the existing building as a 124-room hotel with a public café.

Recent hotel sales have also brought optimism for potential improvements.

This month, Toronto-based InnVest, the country’s largest hotel owner and operator, purchased the Hotel Grand Pacific on Belleville Street. The 304-room hotel, owned since 1996 by Pacific Sun, had been on the market for months. The property’s value is close to $48 million.

The Royal Scot Hotel on Quebec Street was sold this year to Vancouver-based Synvest Capital for about $41 million. Synvest’s hotel management division, Roadside Hospitality, will run the hotel. It will also run the Bedford Regency Hotel, which Synvest purchased last year for $8.9 million.

dkloster@timescolonist.com

Cottage prices are set to rise across Western Canada this year ac­cording to Royal LePage’s spring recreational property report, released March 26.

The strongest growth is forecast for Manitoba and Saskatchewan, which will lead the country with 5.5 per cent growth in the median sales value of cottages. This follows 5.7 per cent growth in waterfront cottage prices last year, the strongest growth in Western Canada and the sec­ond-strongest growth rate nationally. Manitoba's Interlake region saw the strongest growth in waterfront cottage prices last year at 6.6 per cent to $395,000 -- an attractive figure versus the regional median of $477,400.

Domestic buyers are driving demand, consistent with other regions, but supply has not kept up, as many properties are generational holds for their families.

Alberta ranks second, with 2.5 per cent growth in median cottage values fore­cast for this year, followed by British Columbia at 1.5 per cent. However, the median value of waterfront retreats in B.C. dropped significantly last year, falling 14.8 per cent. The drop was driven by a 22.6 per cent decline in the Okanagan region.

Royal LePage reports that recreational home inventories through 2025 were largely similar to 2024 volumes, with 69 per cent of recreational real estate agents surveyed indicating that average days on market has increased versus a year ago.

Trends in Western Canada mirror those in Eastern Canada, where more affordable regions are seeing stronger appreciation in values even as the record double-digit growth seen during the pandemic has waned and single-digit growth has become the norm.

Canada's commercial real estate sector could be at a turning point after the national vacancy rates for both office and industrial properties simultaneously declined for the first time since 2020, a new analysis has found.

The report from Colliers International said the national office vacancy rate was 13.6 per cent in the first quarter of 2026, down one percentage point year-over-year and marking one of the most significant improvements since the COVID-19 pandemic.

Canada's industrial market, meanwhile, recorded its first national vacancy decline since 2022, down to 3.5 per cent.

The report said these trends suggest the commercial real estate market as a whole is moving toward a more balanced environment.

"It was quite unprecedented how long, especially office vacancy, went up," said Adam Jacobs, head of research for Colliers Canada, in an interview.

"It was a good five or six years of rising rates ... but the return-to-office momentum we've seen, especially in Toronto, has been very rapid in the last six months and it's really turned the market around quite quickly."

He said leasing demand is still concentrated primarily in the "best of the best" buildings, and it could take some time for that momentum to trickle down to other less coveted properties.

Toronto and other major urban centres in Canada are still working through an oversupply of existing office space after a post-pandemic surge of completions, said Ben Haythornthwaite, CoStar Group’s director of market analytics.

"The office market is like if you had a patient in the intensive care ward, they've now moved into the general ward," said Haythornthwaite.

"It's still sick, but it's not getting any worse and that's why we're seeing vacancy tighten up."

While many companies have moved their employees back to the office for at least part of the week, inventory growth is grinding to "a near-total halt," the Colliers report said.

Less than two million square feet of new office space is currently under construction, marking a major downswing from the period of 2021 to 2023. Each quarter during that stretch, an average of 1.8 million square feet of new supply was delivered nationally.

The slowdown in new office builds means Canada is unlikely to see any meaningful supply gains before the end of the decade, given that construction can take roughly three to seven years per project, said Veritas Investment Research analyst Shalabh Garg.

He predicted vacancy rates will continue falling, especially as more office space is also converted for residential use, but won't reach pre-pandemic levels.

"Five to 10 per cent vacancy rate is what's optimal, but it's hard to see us getting there," he said, noting the last time construction activity was this slow was the early 2000s.

"We would need to see lots more conversion of older office space into some different use."

On the industrial side, Jacobs said the market is coming back strong from a brief shock caused by tariffs and trade uncertainty last year.

Market absorption outpaced new supply in the quarter, with more than 3.6 million square feet newly taken up, compared with three million square feet delivered, according to the report.

Jacobs said the trend shows the market is stabilizing after inventory had been piling up.

"Anywhere you live, you can notice a lot of new warehouse space was built in the last five years and there is just kind of a natural cycle to every market," he said.

"It takes a while to absorb it. But I think we're kind of through the other side of that in both the office market and the industrial, where a lot was built, it was difficult to build it all and now the building is really slowing down and we're starting to see those spaces fill up."

Colliers said industrial construction starts were resilient in the first quarter, with 5.6 million square feet of new projects breaking ground. Toronto, Vancouver, and Calgary drove 76 per cent of all new starts.

"For the most part, I think we're going to continue seeing demand increase for industrial space and we will see that space absorbed," said Haythornthwaite.

He said industrial markets should continue tightening in the coming years, however the looming renegotiation of the Canada-United States-Mexico Agreement continues to cast a shadow of uncertainty in the short-term.

"I think we're probably going to see a slowdown in leasing over the next couple of months, just while people wait and see what happens with that because we're getting so close to it now," said Haythornthwaite.

This report by The Canadian Press was first published April 20, 2026.

Sammy Hudes, The Canadian Press