Whistler Real Estate Blog

Should You Invest in the S&P/TSX Composite Index or The Westin Resort & Spa

Introduction

Let me introduce to you a rare investment opportunity that consists of a real estate portfolio made up of 14 luxury suites in the Westin Resort & Spa, Whistler. 

This portfolio combines 6 studio suites, 4 one-bedroom suites and 2 two-bedroom suites owned by a bare trust currently being sold together for $8,000,000 CAD.  This offering can be bought together through the purchase of the owner corporation’s shares and a simple change of Directors with Corporations Canada.  This portfolio of suites earned a cap rate of just under 5% in 2023.

Westin Resort & Spa vs Four Seasons Resort Whistler

In comparing investment options, I have already researched and published a blog post on purchasing a one-bedroom suite in the Four Seasons Resort Hotel for $975,0000 with a 2023 cap rate of 3.4% and the Westin Resort & Spa Hotel for $646,000 with a 2023 cap rate of just under 5%.  The link to this blog post is HERE

Canadian Stock Index (S&P/TSX Composite Index)

Another investment commonly used for comparison is the Canadian Stock Index (S&P/TSX Composite Index).  Is it a more lucrative option than the purchase of real estate as an investment in the Westin Resort & Spa, Whistler?

Graphical Performance of the S&P/TSX Index vs The Westin Resort & Spa

The cumulative appreciation of the S&P/TSX Index over 10 years accrued to 54%.  The 2023 year-end yield was 2.96%¹

The Westin Resort & Spa’s cumulative appreciation over the same 10 years accrued to 275% for a studio suite, 220% for a one-bedroom suite, and 219% for a two-bedroom suite.  And as a reminder, the 2023 year-end yield (cap rate or ROI) was just under 5%.

Additional Benefits

In addition, while we know we can passively watch market fluctuations of the S&P/TSX Index online, investment in real estate, specifically the Westin Resort & Spa portfolio of suites does offer the following benefits:

1. Tangible Asset Ownership

Investing in real estate, particularly in a renowned location like Whistler, offers the advantage of tangible asset ownership. Real estate is a physical asset that can provide not just financial returns but also personal use and enjoyment. Owning a suite in the Westin Resort & Spa allows investors to utilize the property themselves, adding an intrinsic value that stock investments cannot offer.

2. Participate in the Decision-Making

 Real estate investments offer a higher degree of control compared to stock investments. As an owner of a strata lot, and in this case a block of suites, you can participate in the decision-making by using the weight of your votes to influence the management of the property, maintenance, capital improvements, and hotel management, directly affecting the asset's value and income potential.

3. Leading Resort Brands

Whistler is a prime location for both winter and summer tourism activities.  It is world-renowned for its skiing and mountain biking trails as well as its pedestrian-only Village, award-winning restaurants, and variety of year-round family-friendly activities. High demand allows the hotel management to command premium rental rates, further enhancing income stability and growth potential.

In addition, The Westin Resort & Spa is backed by the Marriott Bonvoy Brand which is the world’s largest travel & loyalty company with over 173 million members, a global sales & marketing platform, and the world’s most admired guest loyalty program. Marriott focuses on driving long-term profitable partnerships with owners. This brand strength and loyalty can enhance marketing efforts, attract high-quality guests, and command premium rates at lower costs, giving it a competitive edge over other investment properties and types.²

4. Tax Benefits

Real estate investments offer significant tax advantages, primarily through depreciation and the tax deductibility of mortgage interest. Both of these can offset rental income, reducing the investor’s taxable gross. Both tax benefits are unique to real estate and not applicable to stock investments

5. Inflation Hedge

Real estate traditionally serves as an excellent hedge against inflation. As inflation rises, property values and rental income tend to also increase, preserving the investor’s purchasing power. While stocks also provide some inflation protection, the tangible nature of real estate often makes it a more effective safeguard.

7. Lack of Hotel Locations & Rising Construction Costs

The Whistler real estate market has unique dynamics, driven by tourism and limited land availability. There is no vacant land appropriately zoned or in a ski-in/out location available to build new luxury resort hotels in Whistler as the area approaches its maximum capacity as set by the Community Plan. These factors can lead to higher appreciation rates and rental income growth compared to broader stock market investments, adding a distinct performance dimension to an investor’s portfolio.

Whistler's status as a premier tourist destination ensures consistent demand for high-quality accommodation. The resort's strategic location enhances its attractiveness as an investment, providing long-term stability and growth potential aligned with the Resort’s brand and market position.

Increasing construction costs due to inflation can enhance the value of existing properties. As it becomes more expensive to build new resorts, the value of established properties like the Westin Resort & Spa can rise, providing an additional layer of security and appreciation potential. 

7. Diversification Benefits

Adding real estate to an investment portfolio diversifies risk. Real estate markets often move independently of stock markets, providing a buffer against stock market volatility. By adding alternative real estate options to your portfolio, an investor can reduce overall portfolio risk.

 8. Community and Lifestyle

Ownership in a luxury resort like the Westin Resort & Spa offers personal enjoyment and lifestyle benefits. Investors can use the suites for personal vacations, leveraging the amenities and prestige of the resort. This personal use aspect adds a layer of value that purely financial investments in the stock market cannot match.  Owners also enjoy preferred access to booking dates and discounts at the Westin’s two restaurants and Spa.

The Westin Resort & Spa Whistler Purchase Decision Model

Decision to purchase = Annual Cap Rate + Asset Appreciation + Intrinsic value + Lifestyle benefits

Conclusion

Investing in a block of suites in the Westin Resort & Spa is a proven long-term investment that offers a solid cap rate and excellent cumulative appreciation making it a compelling choice.

Tangible asset ownership, income growth potential, tax benefits, inflation hedging, diversification, lifestyle perks, and the strength of the Westin Marriott Bonvoy brand collectively enhance the investment’s appeal.

These factors, combined with the personal lifestyle benefits also gained, make the purchase of this portfolio of 14 suites in the Westin Resort & Spa Whistler a decision that you and your fellow investors will not regret.

Call Denise today for a detailed package at 604-902-2033.

Note 1:   IShares Core S&P/TSX Capped Composite Index ETF Link HERE

Note 2;  Marriott Bonvoy Link HERE