May 2024 (percentage change from 2023):
Occupancy: 69.0 per cent (+0.2 per cent)
Average daily rate (ADR): CAD206.39 (+4.5 per cent)
Revenue per available room (RevPAR): CAD142.32 (+4.8 per cent)
“Improvement in Canada’s hotel room rates drove a RevPAR lift in May,” said Laura Baxter, CoStar Group’s director of hospitality analytics for Canada.
“The occupancy lift, however, was marginal, with the metric contracting across the lower-tier hotels, while Upscale through Luxury showed growth. ADR increases across all classes kept RevPAR comparisons in positive territory.
“While group occupancy fell 5.5 per cent, transient grew 2.4 per cent. The growth in the transient segment did not, however, translate to higher rate growth. The lower gain in transient room rates is a trend worth watching, as some markets are seeing rate decline due to the softening of the segment’s demand.”
Among the provinces and territories, British Columbia recorded the highest occupancy level (74.3 per cent), which was 3.3 per cent above 2023.
Among the major markets, Vancouver saw the highest occupancy (83.8 per cent), up 1.2 per cent over May 2023.
The lowest occupancy among provinces was reported in Prince Edward Island (54.5 per cent), down 9.5 per cent against 2023.
At the market level, the lowest occupancy was reported in Calgary (-1.9 per cent to 67.0 per cent).
“Hoteliers are relatively optimistic as we approach the summer high season,” Baxter said. “Recent consumer sentiment reports about domestic leisure travel and slightly lower interest rates have contributed to the optimism, particularly in destinations driven by leisure demand. However, many hoteliers are also reporting shorter booking windows compared to previous years, causing limited visibility into the strength of demand.
“STR’s 2024 forecast reflects slower rate growth, at 1.9 per cent, due to an expected deceleration in the metric during the last three quarters compared to the first. Our downgrade to occupancy was material, with the metric now expected to decrease 0.5 per cent year over year due to lower-than-expected demand as weaker economic conditions take a bigger toll than expected.”
