The panel discussion was supposed to address what was keeping chief financial officers in the hotel industry up at night, but it turns out many are sleeping quite soundly — these days at least.

Zach Pendley, leader of real estate and hospitality transactions and valuations for accounting and consulting firm EY Canada, said revenue per available room was up a record 17% in 2023. When the pandemic struck a few years earlier, it drove down hotel demand to levels that made industry executives wonder what kind of recovery lay ahead so he said last year's results were a big, pleasant surprise.

"It astounded most of the industry: the strength and resilience of the market," said Pendley during the Hotel Capital Connection conference in Toronto earlier this month.

He teased George Kosziwka, chief strategy officer of InnVest Hotels, about how he said during a pre-panel discussion the only thing keeping him up at night was how the Toronto Maple Leafs would replace their starting injured goalie.

"I think that tells you the industry's state of mind and how there is not as much keeping people up at night," said Pendley.

The moderator also joked with Kosziwka about his ability to sleep after InnVest made its largest deal since 2007 when it bought a $410 million hotel portfolio from Morguard Corp.

Kosziwka, who was chief financial officer of InnVest before being named chief strategy officer for the firm last month, shared some insight on the deal, including that the company wants to grow in the mid-scale hotel market.

"We were missing out in that space, which was very, very profitable," he told the panel.

The Morguard portfolio comprises 2,248 suites in 14 properties in Toronto and Nova Scotia, including several airport properties.

"It was a long drawn out process, four rounds," said Kosziwka. "I think there were 12 initial bidders in the first round. It was kind of our strategy to sit in the bush a bit. Not be the highest bidder, but be high enough to get to the next round."

Morguard didn't want the buyer to resell any of the 14 properties, but four properties moved to Manga Hotel Group.

The InnVest executive said the desire to move some assets slowed the process, but interest rates dropped in the interim and that helped InnVest with the transaction.

Kosziwka described the portfolio as "under-maintained," with most of the assets Marriott branded or independent.

"Morguard's strategy was really not to invest in the hotels. We know that is not a good long-term strategy, but that was their strategy. Marriott was frustrated with them," said the chief strategy officer.

InnVest has its own renovation team, which the company felt left it in a good place to revamp the properties.

One question for panelists was whether the first major deal of the year was a harbinger of things to come in 2024.

"I think so," said Kosziwka, adding that interest rates coming down could help drive transactions.

Chantal Nappert, chief financial officer of Pomeroy Lodging Group, said there are a lot of investment opportunities in the market today.

"I think what keeps CFOs up a night is capital allocation. There are so many good acquisitions, renovations and development opportunities that are trying to decide what to pursue," said Nappert, adding there are major decisions to make on locking down debt or floating debt.

Karen Tam, chief financial officer of Choice Hotels, said what makes her happy is seeing her company's franchisees do well.

"Watching them go through what they did for a couple of years was terrible," she said. "Seeing them have a couple of excellent years is wonderful."