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Marriott International has acquired the Delta Hotels and Resorts brand to become the largest full-service hotel chain in Canada.

The $168-million sale by the British Columbia Investment Management Corporation (BCIMC), an agency that invests money for 500,000 B.C. public sector employees, to Marriott is subject to regulatory approval.

The deal does not include any property acquisitions: it consists of a Marriott takeover of the brand and management of the 38 Delta-branded hotels in 30 Canadian cities for a 30-year period.

The Maryland-based hospitality services multinational corporation is taking advantage of the weak Canadian dollar, which is usually a boon for tourism and the hospitality sectors in the country. The Delta chain is also a suitable acquisition for Marriott as it is also a upper mid-scale hotel chain.

“Delta has an impressive portfolio of hotels that are among the most preferred in Canada.  With this acquisition, we are continuing our focus on building our brand portfolio and growing in attractive regions outside the U.S.,” reads a statement by Arne Sorenson, president and chief executive officer of Marriott International.

“Combining the strong Delta brand with Marriott’s hotel development expertise will accelerate growth of the brand in Canada and in other markets around the world.”

If the transaction is approved by the federal government, Marriott’s reach will grow from 86 hotels with 17,000 rooms to a total of 124 hotels with 27,000 rooms. Five of the hotels totalling 1,100 rooms are also under development.

It is not known whether any of the Delta hotels will be rebranded into Marriott, however, the company has already confirmed that the Marriott rewards system will be extended to include Delta properties.

In 2013, Marriott reported worldwide revenues of US$12.784-billion. It has over 4,000 properties, totalling nearly 700,000 rooms, and more than 200,000 employees in 80+ countries.

Delta was founded at B.C. in 1962 with the opening of a 62-room motel in Richmond. There are currently six Delta properties in the province, including one hotel in downtown Vancouver, one casino-hotel property in Burnaby and one hotel-resort in Whistler Village.

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Toronto-based InnVest Real Estate Investment Trust (TSX:INN.UN) has bought Vancouver’s 644-room Hyatt Regency Hotel for $140 million, the equivalent of $217,000 per room.

 

Following completion of the sale, a Hyatt Hotels Corp. affiliate will continue to manage the hotel under a new long-term management contract. The sale is expected to close this month.

 

Built in 1973, the Hyatt is located at the northwest corner of Burrard and West Georgia streets and has some of the city’s largest standard guest rooms and meeting space.

 

Carrie Russell, managing director of hotel industry analyst firm HVS International, said there has been increased investor interest this year in downtown Vancouver hotel properties. She noted that so far in 2014 the Days Inn and Best Western Sands hotels have sold, both to investors from China. Also a “good portion” of the hotel-condos in the Westin Grand hotel has reportedly been sold to a single investor, Russell added.

 

Last week, Daniel Fournier, chairman and CEO of Ivanhoe Cambridge told BIV that its Fairmont Hotel Vancouver is close to a sale under a bid process that is now closed. 

 

Russell is not surprised by the hotel sales action.

 

“Vancouver is heading into a very strong convention year, Revpar [revenue per available room] is very high, and there has been little new construction. The outlook for the Vancouver hotel market is very positive.”

 

Courtesy of Business in Vancouver

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