What CHIC 2026 Really Told Us About Canada’s Hotel Landscape
David Zaltzman
This is what we can share about 2026 Canada’s hospitality: occupancy is stable, rates are rising, and supply is contained. But the delegates who gathered at the Canadian Hotel Investment Conference (CHIC) in Toronto this week left with something far more nuanced and far more useful. What emerged from the sessions was a portrait of a market that is stable and continues to grow. It is selective. And in a selective market, strategy is everything.
For entrepreneurs, hotel owners and C-suite executives, the headline number is a projected real GDP growth of 1.2% in 2026 before accelerating toward 1.9% in 2027. But this is only part of the story. The more telling narrative lies in what is happening beneath that figure: a structural reset of demand sources, a permanent recalibration of the border, and a technological inflection point that is reshaping how hotels operate.
1.2%GDP Growth Forecast |
+7.5%Overseas Visitors |
+5.9%Domestic Travel |
-2.9%US Visitors to Canada |
−23.6%CDN Travel to US |
+2-4%RevPAR Growth |
01 THE BORDER RE-ALIGNMENT IS NOT A BLIP
The most striking data point from CHIC was not a hotel metric. It was a travel behaviour statistic: Canadian residents’ trips to the United States fell by 23.6% in 2025, while US arrivals into Canada dipped by 2.9%. These are not rounding errors. They are directional signals of a structural realignment driven by trade tensions, geopolitical friction, and a growing instinct among Canadian travellers to “buy and go local.”
At the same time, overseas visitors surged by 7.5%, and domestic tourism expanded meaningfully, with Statistics Canada recording more than 234 million domestic visits and a 13.5% jump in domestic tourism spending. Canada is quietly becoming a “safe harbour” for international travellers who previously defaulted to the United States.
For hotel investors, the implication is direct: marketing budgets still weighted toward US drive-to markets are increasingly misaligned with where demand is actually coming from. The priority should be reorienting guest acquisition strategies toward domestic leisure, high-yield overseas travellers, and the event-driven compression windows — most notably Toronto and Vancouver ahead of the FIFA World Cup – that will generate outsized returns for well-positioned assets.
“The old playbook of waiting for US travellers to return is not a
strategy. It is a wish. The data from CHIC suggests the
replacement demand is already here.”
02 THE HOTEL MARKET: HEALTHY FUNDAMENTALS, NARROWING MARGINS
According to CBRE’s 2026 outlook presented at CHIC, the national hotel market remains constructive. RevPAR is expected to grow 2% to 4% over 2025 levels, national occupancy should hold near 66%, and average daily rates are projected to reach approximately $216. The fundamentals are intact. But there is a meaningful caveat baked into these figures.
Growth is being driven by rate, not volume. Occupancy is not expanding – pricing discipline is doing the work. That is a healthy position, but it places a premium on revenue management sophistication. Owners who are not actively optimizing their pricing stack in real time are, by definition, leaving money on the table.
The supply picture offers some relief. Room-night supply growth ran below 1% annually between 2020 and 2024. The forward pipeline shows 1.5% growth forecast for 2026 and 2.1% for 2027, manageable by any historical standard. Replacement costs remain high and development timelines are long, which creates a durable structural advantage for existing, well-located assets, particularly urban, airport corridor, and drive-to leisure properties.
03 THE AI INFLECTION: EFFICIENCY IS NO LONGER OPTIONAL
One of the most candid observations from the CHIC program was that Canada’s hospitality sector is undergoing structural change with artificial intelligence and that this is not a technology story. It is a labour story.
Reduced immigration targets and the exit of non-permanent residents are compressing the available labour pool precisely as operating costs escalate. Technology is filling the gap that the workforce is vacating. AI applications in forecasting, dynamic pricing, guest targeting, staffing optimization and back-office efficiency are moving from pilot projects to operational imperatives. For operators who have not yet integrated these tools, the competitive disadvantage compounds with each quarter of inaction.
This is particularly critical for independent operators and entrepreneurial owners. Branded chains have accelerating advantages in technology deployment at scale. Unbranded assets must find their equivalent edge through sharper labour productivity frameworks, disciplined expense controls, and, increasingly, through selective AI deployment at the property level.
04 CAPITAL STRATEGY IN A “STEADY RATE” ENVIRONMENT
With the Bank of Canada widely expected to hold its policy rate near 2.25%, the cost of capital is predictable — a welcome change from the volatility of 2022 to 2024. But predictable does not mean cheap, and the era of passive financial engineering is over. Discipline in underwriting is the new source of alpha.
Government spending in defense and infrastructure is creating localized demand hot zones around certain corridor markets and secondary cities. Investors who can identify these sub-markets ahead of the curve, and position assets to serve both corporate transient and project-driven group demand, will find opportunities that do not appear on standard STR benchmarks.
Tourism is also emerging as a trade diversification instrument at the federal level. As Canada actively reduces its reliance on a single major trade partner, inbound tourism revenue is being treated as a meaningful non-US export category. Policy alignment with this goal could translate into promotional support and infrastructure investment that benefit the sector in ways not yet fully priced into asset valuations.
THE BOTTOM LINE
The most honest takeaway from CHIC 2026 is this: Canada’s hotel market remains firmly investable! Having said that, the broad-based upcycle that forgave strategic mediocrity for much of the past decade is no longer the operating environment. 2026 is a year of precision.
The winners, and CHIC made clear they are already separating from the field, will be those who use the relative quiet of this transitional year to integrate AI into their operations, rebalance their guest acquisition toward domestic and overseas demand, and build portfolios that are structurally aligned with where both capital and travelers are heading.
Heads in beds still matter. But as Dawn Desjardins put it, eyes on the economy matter just as much. In a selective market, the gap between the attentive and the inattentive compounds quickly.
The journey continues. The question is not whether you see it –
it is whether your portfolio is positioned to catch your fair
share.
