Canada’s hotel industry reported its highest performance since September 2022, according to STR‘s May 2023 data.
May 2023 (year-over-year percentage change)
- Occupancy: 69.2% (+9.3%)
- Average daily rate (ADR): CAD197.10 (+15.0%)
- Revenue per available room (RevPAR): CAD136.32 (+25.7%)
“Canada’s hotel room demand exceeded the pre-pandemic comparable for the seventh consecutive month,” said Laura Baxter, CoStar Group’s director of hospitality analytics for Canada. CoStar Group is the parent company of STR. “To put the country’s 3% demand growth from 2019 into perspective, the metric was up just 1% in the U.K. and down 2% in the U.S. With such robust demand, room rates approached nearly $200, up 18% over 2019. The growth rate compared to 2019 has been similar over the last three months, suggesting that the rate index may have plateaued. Major urban locations are still benefitting from rebounding demand and ADR growth, and in some cases, constrained supply. There is also no sign of weakness in the transient leisure segment at a national level, as the demand index hit a post-pandemic high at 113, while weekend occupancy, which can be used as a proxy for leisure demand, was also ahead of last month at 106. “May weekday occupancy is a good litmus test of corporate hotel demand, as it is a popular month for corporate travel in Canada with very few religious holidays and only one statutory holiday. The segment performed well with the metric rising to 100% of 2019 levels, or up 11.9% year over year. The weekday rate index also remained elevated, up 15%.”Among the provinces and territories, Newfoundland and Labrador recorded the highest May occupancy level (79.9%), which was up 46.0% year over year. Among the major markets, Vancouver reported the highest occupancy level (83.0%), which was 8.5% above May 2022. Prince Edward Island (+15.1% to 59.1%) and New Brunswick (+7.9% to 59.1%) matched for the lowest occupancy among provinces. At the market level, the lowest occupancy was reported in Edmonton (60.9%), which was 10.2% above the 2022 comparable. “STR and Tourism Economics launched an updated forecast in June and the new version remains similar to the last, projecting full-year occupancy to return to 2019 levels this year,” said Baxter. “What has changed is that inflation-adjusted ADR and RevPAR are also expected to reach pre-pandemic levels in 2023, which is earlier than anticipated in the previous version.”.
