2002/2003 market outlook 

The June 2002 edition of Trends included PKF's National Outlook for 2002/2003 as well as our outlook for the major urban markets across the country including Vancouver, Calgary, Edmonton, Winnipeg, Toronto, Ottawa, Montreal, Quebec City, and Halifax/Dartmouth. These forecasts are further evaluated here relative to the performance of the industry outside these major markets. This edition also includes a 2002/2003 Outlook specific to the Full Service and Limited Service segments as well.  

At a national level our forecasts for 2002 reflect a recovery of the demand lost in the last four months of 2001, with demand levels up 3% over actual 2001 levels.  With a further 1.5% increase in supply in 2002, occupancy will improve to 63%, but will still be below last year's pre-September 11^th performance.  Average daily rates are forecast to increase by 2.5% in 2002 over actual 2001 levels, but will be up only 1% relative to pre-September 11^th forecasts at the end of August. With supply and demand growth in balance in 2003, national occupancy will remain in the range of 63%, while average daily rates are forecast to increase by about 2.5%.  

Source: PKF Consulting

The ten major markets examined individually are also forecast to realize a supply demand balance for 2002 maintaining an occupancy of 65% in 2002.  Supply is forecast to outpace demand in 2003 for a slight drop in occupancy to 64% in 2003.  Average daily rates are forecast to increase to $122 in 2002 and $125 in 2003. 

Source: PKF Consulting

The balance of Canadian markets are also expected to maintain a flat occupancy relative to 2001 at 61%. With moderate supply increases in 2003 occupancy is forecast to improve to 62%. Rate growth of 2.5% has been projected in each of the next two years for an average daily rate of $113 in 2002 and $116 in 2003.

Source: PKF Consulting

Full service properties were impacted to a greater extent than limited service properties by the events of September 11^th.  A flat occupancy of 66% has been projected for both 2002 and 2003, with an average daily rate of $81 in 2002 and $84 in 2003. 

Source: PKF Consulting 

Limited service properties realized minimal impacts in the fallout of September 11^th, dropping only one point in occupancy relative to 2000 results.  With demand outpacing moderate supply growth in 2002 occupancy is forecast to reach 2000 levels of 60%.  This occupancy is expected to be maintained in 2003, with an average daily rate of $83 dollars in 2003.

LIMITED SERVICE HOTELS
	2000 Actual	2001 Actual	2002 PKF (F)	2003 PKF (F)
Occupancy	60%	59%	60%	60%
ADR	$76	$79	$81	$83
RevPar	$46	$47	$48	$50

Source: PKF Consulting