While the Canadian accommodation industry
started the year off well, posting a 2.6% increase in demand
in January and February 2003, demand levels started slipping
by 1% in March, and thereafter fell sharply by 11% in April,
another 9% in May, a further 10% in June, and yet a further
9% in July. While the industry reported a loss of close to
23,000 room nights in March, April results deteriorated rapidly
to a shortfall of over 662,000 occupied room nights. May
was almost as devastating with over 590,000 room nights lost,
with the losses in June accelerating to 732,000 occupied
room nights, and July posting losses almost equivalent to
April at 652,000 room nights. Since March, the industry has
suffered a total deficit of over 2.7 Million room nights
in comparison to last year’s performance.
During the month of July, Canada as a whole
lost a further $126 Million in room revenue in comparison
to July of last year, down from the $136 Million in losses
recorded in June. Since April, the room revenue losses across
Canada total $445 Million. Accounting for
the other on-site ancillary sources of revenue generated
by the accommodation sector, Canada’s combined accommodation
revenue loss for the 4-month period April to July is estimated
at $685 Million.
As domestic health concerns about SARS dissipate, the disastrous economic effects
continue to mount for Canadian Hoteliers well into the peak summer travel
season. Hardly comforting, yet positive, Downtown Toronto accommodation operators
have begun to close the gap. Year-over-year demand levels have improved from
losses of 30 to 40% per month over the April to June period to less than
25% in July. Room revenue losses over this same period have improved from
50% to 40% in July. Unfortunately for some of Canada’s other major
markets, especially those relying on international and group tour business,
business volumes are still eroding, however, this is more a function of the
fact that these markets were relatively unaffected in the initial months
of April and May.
LOOK FOR PKF’S UPCOMING RELEASE
OF
TRENDS IN THE HOTEL INDUSTRY
ANNUAL OPERATIONS REPORT – 2002 RESULTS
PKF would like to announce the upcoming
release of the 2003 Canadian edition of Trends in
the Hotel Industry Annual Operations Report. This
annual publication contains the 2002 operating results for
555 hotel properties representing about 103,000 guest rooms.
The 50-page report provides detailed financial data by operating
department nationally and regionally for full service hotels,
limited service hotels, suite hotels and resorts. The 2002
data indicates that relative to 2001, there was a 1% increase
in total revenues per available room after a 3% decrease
in 2001. Net income before other fixed charges increased
by 1% nationally in 2002, after decreasing 9% in 2001. The
full findings of this report will be released by the end
of September 2003.
Fran Hohol, Principal
Jeff Hyslop, Research
PKF Consulting
