By
year-end 2004, national occupancy levels recovered to 62% at
an average
daily rate of $117. In comparison to 2002
pre-SARS levels, demand was ahead by 2.3%, offsetting supply growth
of 2.0% over the past 2 years. In fact, national demand has now
rebounded to 2000 levels – its previous high. At a national
level, our forecasts for 2005 reflect a continued 2.5% growth momentum.
With a further 1.0% increase in supply in 2005, occupancy will
improve to 63%. Average daily rates are forecast to increase by
3.0% in 2005, as the market continues to dig itself out of its
significant rate erosion of the past 2 years, with the ADR forecast
to reach $121.
By year-end 2004, demand in Toronto had fully
returned to pre SARS levels, with occupancy 2 points ahead of 2002,
however ADR was still lagging 2% behind 2002. With a 3.1% growth
in supply expected to enter the 905 region this year, Toronto is
forecast to achieve a 66% occupancy and an average daily rate of
$132 in 2005.
Vancouver also performed well in 2004. Vancouver
was up by about 9% over 2002 demand levels closing the year at
67% occupancy and grew by 3.2% in ADR to $119. With a 1.4% increase
in supply, Vancouver is projected to achieve a 67% occupancy in
2005 at an ADR of $122.
With the opening of the new Niagara Fallsview
Casino Resort and a 7.6% growth in supply, Niagara Falls experienced
a 9% increase in demand in 2004 compared to 2002. This market is
also enjoying rate growth, with ADR finishing at $138 in 2004,
close to $7 ahead of its previous high achieved in 2002. Supply
levels are forecast to grow by a further 2.7% in 2005, holding
occupancy levels at 55%, while rates are expected to increase to
$142.
From
a RevPAR perspective, the best performing markets in 2004 compared
to 2002 were Vancouver (up 6.8%), Calgary
(up 5.5%), Winnipeg (up 4.4%), Halifax/Dartmouth (up 3.0%) and
Niagara Falls (up 1.6%). Even despite the heavy tolls experienced
in Toronto’s recent years, the RevPAR in 2004 was still ahead
by almost 1% compared to 2002 levels. However, 2004 RevPAR levels
were still dragging behind 2002 results in Quebec City, Montreal,
Edmonton and Ottawa.
Fran Hohol, CMC
Principal
