During the economic slowdown of 2009, national occupancy levels reached a low of 58% with an average daily rate of $125. Demand levels eroded by 6%, while average daily rates fell by 5% in 2009, against a national supply growth of 1.9%. The resulting decline in RevPAR at 12.3% is the worst performance that we have observed.
With a further 1.7% increase in supply expected in 2010, set against moderate GDP growth rate of 3% for the Canadian economy, occupancy is projected to improve by 1 point to 59%, reflecting a 3% increase in demand. Average daily rates are forecast to marginally increase by 2% in 2010 to reach $127. Nationally RevPAR is projected to grow by 2.7% this year, but remember that this is off a very low base.
MAJOR URBAN MARKET OCCUPANCY PERFORMANCE |
|
2007
Actual |
2008
Actual |
2009
Actual |
2010
Projection |
Vancouver |
74% |
71% |
65% |
67% |
Calgary |
74% |
72% |
65% |
63% |
Edmonton |
75% |
73% |
65% |
63% |
Winnipeg |
68% |
69% |
64% |
65% |
Toronto |
67% |
66% |
60% |
61% |
Niagara Falls |
57% |
56% |
55% |
56% |
Ottawa |
70% |
70% |
66% |
67% |
Montreal |
67% |
64% |
60% |
59% |
Quebec City |
62% |
67% |
56% |
57% |
Halifax/Dartmouth |
69% |
67% |
63% |
64% |
CANADA |
65% |
63% |
58% |
59% |
MAJOR URBAN MARKET AVERAGE DAILY RATE PERFORMANCE |
|
2007
Actual |
2008
Actual |
2009
Actual |
2010
Projection |
Vancouver |
$133 |
$141 |
$132 |
$142 |
Calgary |
$142 |
$151 |
$144 |
$145 |
Edmonton |
$114 |
$123 |
$120 |
$121 |
Winnipeg |
$103 |
$111 |
$112 |
$114 |
Toronto |
$136 |
$136 |
$124 |
$127 |
Niagara Falls |
$143 |
$139 |
$132 |
$135 |
Ottawa |
$134 |
$136 |
$133 |
$135 |
Montreal |
$138 |
$138 |
$129 |
$132 |
Quebec City |
$138 |
$158 |
$138 |
$141 |
Halifax/Dartmouth |
$126 |
$129 |
$124 |
$127 |
CANADA |
$127 |
$131 |
$125 |
$127 |
MAJOR URBAN MARKET REVPAR PERFORMANCE |
|
2007
Actual |
2008
Actual |
2009
Actual |
2010
Projection |
Vancouver |
$98 |
$100 |
$86 |
$96 |
Calgary |
$105 |
$109 |
$94 |
$91 |
Edmonton |
$85 |
$89 |
$78 |
$76 |
Winnipeg |
$70 |
$77 |
$72 |
$74 |
Toronto |
$90 |
$90 |
$75 |
$78 |
Niagara Falls |
$82 |
$77 |
$72 |
$75 |
Ottawa |
$94 |
$96 |
$87 |
$90 |
Montreal |
$92 |
$88 |
$77 |
$78 |
Quebec City |
$86 |
$105 |
$78 |
$81 |
Halifax/Dartmouth |
$88 |
$86 |
$78 |
$81 |
CANADA |
$83 |
$83 |
$73 |
$75 |
While Quebec City led the country in both demand (up 11%) and double-digit ADR growth (up 23%) in 2008 due to the 400th Anniversary celebrations, last year Quebec City witnessed a 10 point drop in occupancy to 56%, with a 13% decline in average daily rates to $138. PKF projections for Quebec City in 2010 call for an occupancy of 57% and an average daily rate of $141.
By year-end 2009, demand was down by over 7% in Toronto, and rates fell by 9%, to reach 60% at $124. This year, Toronto is expected to see a 1.3% growth in supply, and a 3.3% increase in demand. Toronto is forecast to achieve a 61% occupancy in 2010, with only a 2% improvement in ADR, to reach $127 by year-end.
Vancouver closed the year at 65% occupancy and slid 6% in ADR to $132. With a 3.7% increase in supply, the hosting of the Winter Olympics and an expanded Convention Centre, Vancouver is projected to rebound to 67% occupancy in 2010, with ADR improving by over 7% to $142.
Despite hosting a number of city-wides and sports events, demand levels in Calgary contracted by close to 8% in 2009 against a supply increase of 2%, while rates decreased by 4.5%. For 2010, Calgary is projected to witness a 4.1% increase in supply, with marginal demand and rate growth of 0.5%, resulting in a 63% occupancy at an ADR of $145.
For Edmonton, PKF projections call for a further 5% in supply in 2010, with occupancy decreasing 1 percentage point to 63%, and a modest 1% improvement in the ADR to $121.
While Montreal underwent a 2.3% growth in supply in 2009, demand levels declined by 4.5%, and the city’s rate contracted by 6.5% to reach $129. In 2010, Montreal is expected to undergo a further 2.9% increase in supply, with demand expected to improve by 2%, resulting in a projected 59% occupancy and an average daily rate of $132.
From a RevPAR growth perspective, the worst performing markets in 2009 were Quebec City (down 26.4%), Toronto (down 16.3%), Vancouver (down 14.7%), Edmonton (down 13.6%), Calgary (down 13.6%) and Montreal (down 12.6%). In 2010, Vancouver is projected to lead RevPAR growth (up 11.6%), followed by Toronto (up 4%); Quebec City (up 3.9%), Halifax/Dartmouth (up 3.7%); Winnipeg and Niagara Falls (up 3.5%); Ottawa (up 3.4%); and Montreal (up 1.2%). Both Calgary and Edmonton are expected to continue to struggle in 2010, with RevPAR declines of -3.0% and -1.7% respectively.
Fran Hohol, CMC
Principal, PKF Consulting Toronto
