Canada’s Hotel Industry Achieves 8-Month Performance Peak in May 2024 with Strong CoStar Data

Monday, June 24, 2024

In May 2024, Canada’s hotel industry achieved its peak performance in eight months, as per the latest data from CoStar. CoStar, a premier provider of online real estate marketplaces, information, and analytics, offers valuable insights into the property markets.

May 2024 (compared to 2023):

• Occupancy: 69.0% (+0.2%)
• Average daily rate (ADR): CAD206.39 (+4.5%)
• Revenue per available room (RevPAR): CAD142.32 (+4.8%)

“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%, transient grew 2.4%. 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.”

British Columbia led the provinces and territories with the highest occupancy rate at 74.3%, surpassing 2023 by 3.3%.

Vancouver topped the major markets with the highest occupancy rate at 83.8%, showing a 1.2% increase from May 2023.

Prince Edward Island reported the lowest provincial occupancy at 54.5%, marking a 9.5% decline from 2023.

Calgary had the lowest market occupancy at 67.0%, down 1.9% from the previous year.

“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%, 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% year over year due to lower-than-expected demand as weaker economic conditions take a bigger toll than expected.”

• British Columbia and Vancouver International Airport forge partnership to propel sustainable aviation and economic growth

• TAIN teams up with TIABC to revolutionize BC Tourism

• Powerful blizzard in British Columbia leads to travel chaos and power outages

• Winter havoc in British Columbia: waves, wind, and warnings

• Princess Cruises introduced 2 of its newest jewels yesterday