Canadian hotel industry shows lower occupancy due to less leisure demand in January

January 2024 (percentage change from 2023):

• Occupancy: 49.6 per cent (-1.7 per cent)

• Average daily rate (ADR): CAD175.38 (+4.3 per cent)

• Revenue per available room (RevPAR): CAD87.00 (+2.6 per cent)

“Transient occupancy fell 3.7 per cent year over year, with most of the decline taking place on the weekends, suggesting that individuals are pulling back on discretionary spending,” says Laura Baxter, CoStar Group’s director of hospitality analytics for Canada.

“Warm weather and a lack of snow in popular ski areas contributed to the shortfalls as well, with particularly steep occupancy declines in resorts across Western Canada. Whistler and Banff hotels, for example, recorded occupancy declines of 9 per cent and 12 per cent, respectively. On the positive side of the spectrum, the overall hotel sector is outperforming metrics in the wider economy, with the room rate growth outpacing the 2.9 per cent inflation reading.”

Among the provinces and territories, Manitoba recorded the highest January 2024 occupancy level (58.8 per cent), which was 8.1 per cent below 2023.

Among the major markets, Toronto saw the highest occupancy (61.4 per cent), up 2.2 per cent over January 2023.

The lowest occupancy among provinces was reported in Prince Edward Island (28.6 per cent), down 20.5 per cent against 2023. At the market level, the lowest occupancy was reported in Edmonton (+2.9 per cent to 44.3 per cent).

“The return of group and international travel is expected to be among the main drivers of improvement this year,” says Baxter. “These demand sources should benefit Canada’s largest cities to a greater degree than other location types, and therefore urban hotel performance growth will likely outpace the national forecast.”