After the accommodation sector’s dismal 2009 results, national occupancy levels recovered somewhat in 2010, ending the year at 60% with an average daily rate of $128 in 2010. Demand levels increased by 5% in 2010, while average daily rates improved by 2%, against a national supply growth of 1.4%. As a result, RevPAR rose by a respectable 5.6% in 2010.
With a further 1.5% increase in supply expected in 2011, set against moderate GDP growth rate of 2.4% for the Canadian economy, occupancy is projected to improve by 1 point to 61%, reflecting a 2.5% increase in demand. Average daily rates are forecast to increase by 2.5% in 2011 to reach $131. Nationally RevPAR is projected to grow by 3.6% this year to $80, which means the sector is edging its way back to its 2008 RevPAR high of $83.
MAJOR URBAN MARKET OCCUPANCY PERFORMANCE |
|
2008
Actual |
2009
Actual |
2010
Actual |
2011
Projection |
Vancouver |
71% |
65% |
68% |
66% |
Calgary |
72% |
65% |
64% |
64% |
Edmonton |
73% |
65% |
62% |
61% |
Winnipeg |
69% |
64% |
68% |
67% |
Toronto |
66% |
60% |
66% |
66% |
Niagara Falls |
56% |
55% |
56% |
57% |
Ottawa |
70% |
66% |
67% |
67% |
Montreal |
64% |
60% |
64% |
65% |
Quebec City |
67% |
56% |
60% |
61% |
Halifax/Dartmouth |
67% |
63% |
64% |
65% |
CANADA |
63% |
58% |
60% |
61% |
MAJOR URBAN MARKET AVERAGE DAILY RATE PERFORMANCE |
|
2008
Actual |
2009
Actual |
2010
Actual |
2011
Projection |
Vancouver |
$141 |
$132 |
$147 |
$142 |
Calgary |
$151 |
$144 |
$143 |
$147 |
Edmonton |
$123 |
$120 |
$120 |
$123 |
Winnipeg |
$111 |
$112 |
$116 |
$119 |
Toronto |
$136 |
$124 |
$127 |
$131 |
Niagara Falls |
$139 |
$132 |
$131 |
$134 |
Ottawa |
$136 |
$133 |
$132 |
$136 |
Montreal |
$138 |
$129 |
$135 |
$139 |
Quebec City |
$158 |
$138 |
$137 |
$140 |
Halifax/Dartmouth |
$129 |
$124 |
$124 |
$128 |
CANADA |
$131 |
$125 |
$128 |
$131 |
MAJOR URBAN MARKET REVPAR PERFORMANCE |
|
2008
Actual |
2009
Actual |
2010
Actual |
2011
Projection |
Vancouver |
$100 |
$86 |
$100 |
$94 |
Calgary |
$109 |
$94 |
$92 |
$94 |
Edmonton |
$89 |
$78 |
$74 |
$75 |
Winnipeg |
$77 |
$72 |
$79 |
$80 |
Toronto |
$90 |
$75 |
$84 |
$87 |
Niagara Falls |
$77 |
$72 |
$73 |
$76 |
Ottawa |
$96 |
$87 |
$89 |
$91 |
Montreal |
$88 |
$77 |
$86 |
$90 |
Quebec City |
$105 |
$78 |
$82 |
$86 |
Halifax/Dartmouth |
$86 |
$78 |
$79 |
$84 |
CANADA |
$83 |
$73 |
$77 |
$80 |
As the host city to the Winter Olympics, Vancouver led the country in both demand (up 9%) and double-digit ADR growth (up 11%) in 2010. The opening of the expanded Convention Centre also contributed to Vancouver’s strong year, which benefitted from a city-wide 17% increase in RevPAR. With a 1.5% increase in supply in 2011, Vancouver is projected to dial back to 66% occupancy in 2011, with ADR contracting by 3.4% to $142.
Demand levels in Calgary improved by 1.7% in 2010 against a supply increase of 3.6%, while rates decreased by 1.3%. For 2011, Calgary is projected to witness a 2.7% increase in supply, while demand levels are forecast to improve by 3.3%, and rate by 2.4%, resulting in a 64% occupancy at an ADR of $147.
Together with Calgary, Edmonton was the only other major urban market in Canada to undergo negative growth in 2010, with demand levels down by -2.3% and rates falling by -0.5%, resulting in a negative RevPAR growth of -5.4%. PKF projections call for a further 4.5% increase in supply in 2011, with occupancy decreasing 1 percentage point to 61%, and a 2.3% improvement in the ADR to $123.
Winnipeg was another strong performing market in 2010, achieving the 4th highest RevPAR growth in the country. Demand levels rose by over 5% in 2010, while average daily rates improved by 4.4%, resulting in RevPAR growth of 10%. For 2011, the Winnipeg market is projected to increase supply by over 3%, with both demand and average daily rate forecast to improve by 2.5%, meaning the market should drop by 1 point to 67% occupancy, with ADR forecast at $119.
Toronto also enjoyed a good year in 2010, with demand levels improving by 9%, and ADR increasing by 2.7%, for an overall RevPAR growth of close to 12%. This year, Toronto is expected to see a 3% growth in supply, and a 2.6% increase in demand. Toronto is forecast to hold at 66% occupancy in 2011, while increasing rates by 3%, to reach $131 by year-end.
With a number of major events, including the International Rotary Convention and the return of the Grand Prix, Montreal witnessed a 6.7% improve in demand levels, and a 3.8% increase in rates, in order to close the year at an overall 11.5% increase in RevPAR. For 2011, Montreal is expected to see a modest 0.4% increase in supply, with demand expected to improve by 2%, resulting in a projected 65% occupancy and an average daily rate of $139.
Niagara Falls is opening a new Convention Centre in 2011, while the Ottawa Convention Centre will re-open as a new and expanded facility. For Niagara Falls, both demand and rates have been forecast to improve by 2.5% in 2011, against a modest supply increase of less than 1%. Ottawa is expected to gain a further 3.2% in supply, while demand levels are projected to increase by 3%, and as such will maintain a 67% occupancy.
Last year Quebec City witnessed a 4 point increase in occupancy to 60%, with a further 1% decline in average daily rates to $137. PKF projections for Quebec City in 2011 call for an occupancy of 61% and an average daily rate of $140.
From a RevPAR growth perspective, the best performing markets in 2010 were Vancouver (up 17.2%), Toronto (up 11.8%), Montreal (up 11.5%), Winnipeg (up 9.9%), and Quebec City (up 6.1%). In 2011, Halifax is projected to lead RevPAR growth (up 5.1%), followed by Quebec City (up 4.5%), Niagara Falls (up 4.4%), Calgary (up 2.8%), Toronto (up 2.6%), Ottawa (up 2.3%), Winnipeg (up 1.7%), and Edmonton (up 1.2%). Vancouver is the only market projected to see a negative RevPAR growth of -5.6%, coming off its Olympic year.
Fran Hohol, CMC
Principal, PKF Consulting Toronto
