At year-end 2005, national occupancy levels were recorded at 63% with an average daily rate of $119. National demand posted a 4.7% growth in 2005, well ahead of the national supply growth of 1.3%. With a further 2.1% increase in supply expected in 2006, occupancy is projected to improve to 65%, reflecting a continued 4% growth momentum. Average daily rates are forecast to increase by 2.5% in 2006 to reach $122.
By year-end 2005, demand in Toronto was only 1% behind its previous record year of 2000, with ADR returning to 2002 levels. This year, Downtown Toronto is expected to see a 3% growth in supply with a further 6.3% growth expected to enter the 905 region. As such, Toronto is forecast to achieve a 66% occupancy and an average daily rate of $134 in 2006.
Edmonton and Calgary equally performed very well in 2005, exceeding our occupancy projections. Edmonton witnessed an 8.5% increase in demand, while Calgary saw a 6.8% growth in demand. On the rate side, Calgary achieved a 3.5% increase in ADR to close the year at $116, while Edmonton could not break through the $100 mark, with a 1.6% rise in ADR. For 2006, Calgary is expected to undergo a 3% increase in supply and is projected to achieve a 70% occupancy at an ADR of $118. With a 1.9% increase in supply, Edmonton is forecast to realize a 67% occupancy and $101 ADR.
Vancouver was up by about 5% over 2004 demand levels closing the year at 69% occupancy and grew by 2.8% in ADR to $121. With a 1.7% increase in supply, Vancouver is projected to achieve a 70% occupancy in 2006 at an ADR of $125.
From a RevPAR growth perspective, the best performing markets in 2005 were Calgary (up 10.2%), Edmonton (up 7.7%), Vancouver (up 7.3%), Toronto (up 5.6%) and Ottawa (up 4.2%). At the same time, 2005 RevPAR levels for Montreal were on par with 2002 results, while Quebec City fell 6% behind 2002 levels, due to a disappointing summer.
Fran Hohol, CMC
Principal
