At year-end 2008, national occupancy levels were recorded at 63% with an average daily rate of $131. While average daily rates improved by 3%, demand levels fell by 0.5% in 2008, against a national supply growth of 1.8%.
With a further 1.4% increase in supply expected in 2009, set against a contracting Canadian and global economy, occupancy is projected to fall by 2 points to 61%, reflecting a 2.4% decline in demand. Average daily rates are forecast to marginally increase by 1.5% in 2009 to reach $133.
MAJOR URBAN MARKET OCCUPANCY PERFORMANCE |
|
2006
Actual |
2007
Actual |
2008
Actual |
2009
Projection |
Vancouver |
72% |
74% |
72% |
68% |
Calgary |
74% |
74% |
72% |
69% |
Edmonton |
72% |
75% |
73% |
71% |
Winnipeg |
65% |
68% |
69% |
68% |
Toronto |
66% |
67% |
66% |
63% |
Niagara Falls |
58% |
57% |
55% |
52% |
Ottawa |
69% |
70% |
71% |
68% |
Montreal |
68% |
67% |
64% |
61% |
Quebec City |
63% |
62% |
67% |
59% |
Halifax/Dartmouth |
69% |
69% |
66% |
63% |
CANADA |
65% |
65% |
63% |
61% |
MAJOR URBAN MARKET AVERAGE DAILY RATE PERFORMANCE |
|
2006
Actual |
2007
Actual |
2008
Actual |
2009
Projection |
Vancouver |
$126 |
$133 |
$138 |
$141 |
Calgary |
$127 |
$142 |
$151 |
$157 |
Edmonton |
$103 |
$114 |
$122 |
$126 |
Winnipeg |
$99 |
$103 |
$111 |
$117 |
Toronto |
$135 |
$137 |
$136 |
$138 |
Niagara Falls |
$143 |
$143 |
$140 |
$140 |
Ottawa |
$128 |
$134 |
$136 |
$138 |
Montreal |
$140 |
$138 |
$138 |
$139 |
Quebec City |
$139 |
$138 |
$158 |
$142 |
Halifax/Dartmouth |
$124 |
$126 |
$129 |
$130 |
CANADA |
$123 |
$127 |
$131 |
$133 |
MAJOR URBAN MARKET REVPAR PERFORMANCE |
|
2006
Actual |
2007
Actual |
2008
Actual |
2009
Projection |
Vancouver |
$91 |
$98 |
$99 |
$96 |
Calgary |
$95 |
$105 |
$109 |
$108 |
Edmonton |
$74 |
$85 |
$89 |
$89 |
Winnipeg |
$64 |
$70 |
$77 |
$80 |
Toronto |
$89 |
$91 |
$91 |
$87 |
Niagara Falls |
$83 |
$82 |
$77 |
$73 |
Ottawa |
$88 |
$94 |
$96 |
$94 |
Montreal |
$95 |
$92 |
$88 |
$85 |
Quebec City |
$87 |
$86 |
$105 |
$85 |
Halifax/Dartmouth |
$85 |
$88 |
$86 |
$82 |
CANADA |
$79 |
$83 |
$83 |
$81 |
With its 400th Anniversary celebrations, Quebec City led the country in both demand (up 9.1%) and double-digit ADR growth (up 14.4%) in 2008. PKF projections for Quebec City in 2009 call for a return to pre-celebration years, at an occupancy of 59% and an average daily rate of $142.
With the exception of Quebec City, the Western cities of Winnipeg and Edmonton were the leaders in rate growth in 2008, posting 7.5%, and 7.3% ADR growth respectively. With the closure of the 271-room York Hotel in late 2007 and the opening of the Sandman Hotel in 2008, Winnipeg’s supply decreased by 1.5%, while demand was marginally ahead by 0.4%. In 2009, Winnipeg’s demand is expected to soften, while rates are projected to increase by 5%. For Edmonton, PKF projections call for a further 1.3% in supply in 2009, with occupancy decreasing to 71%, and the ADR rising by 3% to $126.
While Calgary posted a 6.6% rate increase in 2008, demand levels contracted by 2.5% against a supply increase of less than 1%. For 2009, Calgary is projected to witness a 2.8% increase in supply, with a second year of negative demand growth, resulting in a 69% occupancy at an ADR of $157 – a 4% increase over 2008.
Vancouver closed the year at 72% occupancy and grew by 3.8% in ADR to $138. With a 2.4% increase in supply, Vancouver is projected to drop to a 68% occupancy in 2009, with ADR improving by 2% to $141.
By year-end 2008, both demand and rates in Toronto were up by 0.6%, to reach 66% at $136. This year, Toronto is expected to see a 2% growth in supply, and a 2.3% decrease in demand. Toronto is forecast to achieve a 63% occupancy in 2009, with only a 1% improvement in ADR, to reach $138 by year-end.
While Montreal underwent a 3.6% growth in supply in 2008, demand levels declined by 1%, and the city’s rate edged forward by 0.5% to reach $138. In 2009, Montreal is expected to undergo a further 2.9% increase in supply, with demand expected to be down by 1%, resulting in a projected 61% occupancy and an average daily rate of $139.
From a RevPAR growth perspective, the best performing markets in 2008 were Quebec City (up 22.8%), Winnipeg (up 9.6%), Edmonton (up 5.0%), Calgary (up 3.2%), and Ottawa (up 2.5%). The weakest markets were Niagara Falls (down 5.4%), Montreal (down 4.2%), Halifax/Dartmouth (down 2.2%) and Toronto (down 0.5%).
Fran Hohol, CMC
Principal, PKF Consulting Toronto
