a preview of pKF’s trends in the hotel industry, canadian edition 1999

TRENDS IN THE HOTEL INDUSTRY - Canadian Edition is a statistical review of operating and financial information voluntarily contributed by hotels, motels and resorts from across Canada.  The 1999 edition, to be released in September 2000, includes operating results of 522 independent and chain hotel properties, representing about 100,000 guest rooms nationally. 

1999 marked the seventh consecutive year of increased profitability in the Canadian accommodation industry, with income before fixed charges more than doubling over the 1992 to 1999 period.  According to results within this year’s “Trends Hotel Operations Report”, improvements in 1999 relative to 1998 were made in all property types in almost every region across the country.

The 1999 data indicates that relative to 1998, there was a 5% increase in total revenues per available room after a 9% increase in 1998.  Net income before fixed charges increased by 11% nationally by 1999.

The strongest revenue and net income improvements were experienced in Central Canada (Ontario and Quebec) with revenues increasing 8% and net income before other fixed charges increasing 18%.  The weakest revenue improvement was in Atlantic Canada, where revenues increased by only 2%.  However, net income before other fixed charges increased by 7%.  In Western Canada, despite a 4% increase in revenues, net income before other fixed charges increased by only 5%.  British Columbia and Alberta properties still lead the country in overall bottom line performance, positively influenced by the strength of the resort sectors in each of these provinces.

Nationally, limited service hotels experienced an 8% increase in revenues per available room and a 14% increase in net income before other fixed charges per available room.  Central Canada led the way, with revenues increasing at 10% and net income before other fixed charges by 21%.  Nationally, the performance improvement of full service hotels was not as strong, with a 4% increase in revenues per available room and a 10% increase in net income before other fixed charges per available room.  Growth was strongest in Central Canada, with revenues increasing by 7% and net income before other fixed charges increasing by 17%.  Ontario and British Columbia full service properties led the country in terms of bottom line performance.

Andrea Sire, Consultant

Pannell Kerr Forster