Earlier this year, the Ontario Ministry
of Tourism and Canadian Tourism Commission retained PKF Consulting
to monitor the impacts on the Canadian Accommodation Industry. The
first report (Jan – April results), analyzing the effects
of the Iraq War, SARS and other factors, on booking pace,
demand change and actual Quarter 1 and potential Quarter
2 cancellations, has been posted on both the Ontario Ministry
of Tourism and Canadian Tourism Commission’s websites
at: www.canadatourism.com and www.tourism.gov.on.ca. The
Quarter 2 survey has now been sent out with results to be
released later this summer. The 2nd report will be even
more effective in gauging the actual effects of SARS over
the 2nd and 3rd Quarter as we continue to monitor the industry
during these difficult times.
During the month of May, with the continued
impact of SARS, Canada as a whole lost a further $90 Million
in room revenue in comparison to May of last year, bringing
the total room revenue losses in April and May to in excess
of $182 Million and total accommodation revenue loss from
all sources to in excess of $250 million. Of the total
$90 Million in room revenue loss in May, $55 Million occurred
in Ontario, $37 Million of which was in the Greater Toronto
Area, and specifically $28 Million was amongst Toronto Downtown
hotels. Of the total $182 Million in room revenue losses
in April and May, $113 Million occurred in Ontario, $76 Million
of which was in the Greater Toronto Area, and specifically
$59 Million was amongst Toronto Downtown hotels.
Across Canada the average hotel room was
down almost $300 per room in rooms revenue in May, and about $550
in total over April and May, bringing total accommodation
revenue loss from all sources to in excess of $800 per room. However,
the impacts in Toronto and on the downtown hotel properties
specifically, have been the greatest. The average hotel
room in downtown Toronto was down almost $2,000 per room
in room’s revenue in May, and about $3,800 in
total over April and May, bringing total accommodation revenue
loss from all sources for these properties to almost $6,000
per room.
Despite the control of the SARS outbreak,
the prospects for the summer in the many impacted markets
are not strong. A significant level of summer business
was cancelled and will be difficult to replace. While the
impacts in June, July and August, may not be as great as
those in April and May, they will only add to what was already
a devastating year in many Canadian hotel markets.
Fran Hohol, Principal
Jeff Hyslop, Research
PKF Consulting
