Saskatchewan led the nation last year in the amount of revenue generated per hotel room, making the province a leading jurisdiction for hotel investment, says a new report.

The 2009 Canadian Hotel Investment Report by Colliers International Hotels highlighted Saskatchewan as a hot spot for hotel sales. According to figures from PFK Consulting used in the Colliers report, revenue per available room (RevPAR) in Saskatchewan in 2008 grew 11 per cent to $79.40 from $71.56 in 2007. National RevPAR grew only a slight 0.6 per cent last year to $83.02 from $82.50 a year earlier.

RevPAR in Saskatoon rose 1.4 per cent last year to $92.46 from $79.46 in 2007, while in Regina RevPAR grew 7.6 per cent to $78.53 in 2008 from $73.01 a year earlier. According to PFK, the average daily rate for a hotel room in Saskatchewan was $109.87 last year, an 8.5 per cent increase from $101.23 in 2007.

Bill Stone, executive managing director of Colliers International Hotels, said the demand for rooms in the province last year has led to corporate interest in purchasing hotel properties in Saskatchewan. In 2008, seven traditional hotels -- meaning smaller, sometimes independent two to 3.5-star hotels -- priced at more than $1 million were sold in the province last year for a total of $43 million. Not included in the traditional hotel sales is the Delta Bessborough, which was sold last year for $40 million as part of a larger, nationwide deal.

"I think Saskatchewan has been one of the strongest markets, if not the strongest market in Canada," said Stone, explaining while other markets have seen drops in RevPAR and sales, Saskatchewan's hotels market has managed to retain interest from customers and corporate investors.

"There has been downward pressure on rates, but there are examples across the country where they are actually reversing and Saskatchewan has been one of the strongest markets in Canada," he said.

A growing economy, bolstered by strong commodity prices, is one reason why investors have been drawn to Saskatchewan's hotels, Stone explained. The seven properties sold last year recorded an average price per room of $88,200, a figure below the national average of $116,500, but higher than the average price per room recorded from sales in Ontario, Atlantic Canada, Quebec and Manitoba in 2008.

Stone said another reason why investors are looking to Saskatchewan hotels is because of the limited supply of the properties in the province.

"There haven't been a lot of new hotels added, and so you've got a combination of a strong economy and not a significant impact on supply as other markets and operators are able to perform well in that kind of market," he said.

Saskatoon and Regina together led the nation in hotel value index, a measurement in the rate of change of hotel values, with growth of 6.2 per cent in 2008. The cities are forecast to lead the nation with a 3.5 per cent growth in hotel value this year.

ckyle@sp.canwest.com

- 2008 TRADITIONAL HOTEL SALES IN SASKATCHEWAN:

Hotel Community Rooms Price

Bar-B-Inn Motel Assiniboia 28 $1.2 million

Best Western Harvest Inn Saskatoon 91 $15 million

Best Western Parkland Inn Yorkton 80 $ 6.3 million

Best Western Marquis Inn & Suites Prince Albert 77 $6.65 million

Prince Albert Inn Hotel Complex Prince Albert 110 $5.25 million

Super 8 Motel Swift Current Swift Current 63 $6.2 million

Country Squire Inn Moosomin 37 $2.27 million

Source: Colliers International Hotels