Canada Hotels Record Double Digit RevPAR Growth in October


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HENDERSONVILLE, Tenn. — Following seasonal patterns, Canada’s hotel performance fell month over month, but continued a stretch of year-over-year growth, according to CoStar’s October 2023 data.

In comparison to October 2022, occupancy came in at 68.1 per cent (up 2.2 per cent); ADR came in at CAD$196.25 (up 8.8 per cent); and RevPAR came in at CAD$133.57 (up 11.2 per cent).

Among the provinces and territories, Nova Scotia recorded the highest October occupancy level (75 per cent), which was 6.3 per cent below 2022. Among the major markets, Vancouver saw the highest occupancy (77.7 per cent), which was 0.1 per cent ahead of October 2022.

The lowest occupancy among provinces was reported in P.E.I. (56 per cent), down 25.8 per cent against 2022. At the market level, the lowest occupancy was reported in Edmonton (up 10.1 per cent to 59.5 per cent).

“Following three months of single-digit, year-over-year growth, RevPAR grew double digits for the first time since June,” says Laura Baxter, CoStar Group’s director of Hospitality Analytics for Canada. “Full-service and urban hotels performed particularly well, with weekday occupancy in downtown Vancouver exceeding 2019 levels for the first time since March. There was also growth in group demand compared to the last few months, but despite improvements, the segment remains below average levels. The silver lining is group rates, which are up 26 per cent compared to 2019, were stronger than the transient rate index for the first time. Higher occupancy this year has driven revenue across all departments within full-service hotels. But higher occupancy and elevated costs are eroding margins achieved last year when leaner hotel operating models were combined with strong ADR growth. This year, inflated costs are lowering margins, particularly undistributed expenses and higher wages.”

Looking ahead, Baxter says, “Our just-released forecast for 2023 was upgraded once again as rate growth surpassed expectations. We have also lifted ADR projections slightly for 2024, at 1.8 per cent, while occupancy growth is forecasted to be more marginal at 0.4 per cent. This is despite a 0.4 per cent GDP contraction expected to occur as people continue to prioritize travel against the backdrop of muted hotel inventory growth.”


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