Local hotel assessment values dropped 19.6 per cent from 2016 to 2017.
Mike Krim of Tanmar Consulting shared this information at a recent council meeting as part of an update on local residential and commercial property assessments. Krim cited lower occupancies and decreased room rates as major factors in the decline in hotel values.
“We have to follow what market values do when we do assessments,” Krim said. “The hospitality industry is more susceptible to changes in the economy than maybe other property types.”
According to Krim, about 10 local hotels experienced a drop in business during the assessment year, partly due to increased competition from other hotels in the region.
“A lot of new hotels have been built in the area in the last few years, including in Sherwood Park. And so when you get that many extra rooms in the area, trying to get market share, it certainly affects the other existing hotels,” added Krim.
Hotel assessment values have been dropping for a couple of years. Krim said that Sherwood Park hotels have experienced a similar or greater or decline.
The city uses updated assessment values when determining property tax bills.