The
year 2004 was hailed to be the “year of recovery” for
the Canadian Accommodation Industry, following the significant
impacts of the SARS crisis and Iraq War in 2003. By year
end 2004, national occupancy levels recovered to 62.0%, a
3.1 point rebound over 2003. Average daily rates also rose
3.1% to end 2004 at an average daily rate of $117.
At a national
level, our forecasts for 2005 reflect a continued 3.0%
growth momentum. With a further 1.0% increase in supply in
2005, occupancy will improve to 63.0%. Average daily rates
are forecast to increase by 2.0% in 2005, as the market continues
to dig itself out of its significant rate erosion of the
past two years, with ADR forecast to reach $120.
With limited
new supply coming on board, the Toronto market recovered
from its SARS crisis to attain a 66.0% occupancy, with an ADR
of $128 by year end 2004. This growth was supported by strong
domestic corporate and leisure travel as well as the recovery
of much of the meeting conference and group tour travel lost
in 2003. Continued demand and room rate growth is forecast
for 2005 with a projected 67.0% occupancy and an average
daily rate of $132, in light of a 2.2% increase in supply.
With a further 5.9% increase in supply for 2006, the Toronto
market is projected to realize an occupancy of 66.0% at an
ADR of $136.
The Vancouver market is projected to achieve
occupancy of 68.0% at a rate of $120 in 2005. Strong economic
growth, including gains in employment will help bolster demand
levels in the Vancouver market. Continued economic growth and
increasing demand from leisure markets are projected to result
in an occupancy rate of 69.0% in 2006. Average room rates are
projected to increase to $123 in 2006.
