As this article is being written London, England is preparing for the 2012 Olympic Games, while Canada is trying to gauge the impact the 2010 games had on the Greater Vancouver and Whistler areas. The long term value of the 2010 Olympics is yet to be determined. However, as it relates to us hoteliers, a look at the data available to date could provide some insight into what future host cities might expect.
PKF Consulting Inc. tracks the top line hotel performance of the hotel industry nationally, including the Greater Vancouver Area (GVA) and the Whistler Resort Area, both of which had essential roles in hosting the 2010 Olympics. The following Table 1 outlines the year to date March figures over the last three years relative to both the GVA and Whistler markets.
Year to date March 2010, the Olympics helped the GVA recover the losses in occupancy, ADR and RevPAR experienced during the economic downturn. Even as compared to the year 2008, the 2010 Olympics helped the GVA exceed YTD March RevPAR performance by 45%. As it relates to Whistler, similar to the GVA, the Olympics helped recover the losses experienced during the economic downturn. However, as compared to the year 2008, the 2010 Olympics helped Whistler to only marginally exceed YTD March RevPAR performance by 3.3%.
The question is how have the GVA and Whistler results impacted the National figures? The following Table 2 outlines the YTD March National figures.
Year to date March 2010, nationally the hotel industry appears to be making progress in terms of recovering some of the losses experienced over the previous year to date March period. Lead by growth in rate, the national RevPAR figure for YTD March 2010 improved by 4.6% over the prior 2009 period. Even though the 2010 YTD March RevPAR amount is still 3.6% behind the same 2008 period, the 2010 figures suggest that momentum is moving in the right direction.
How true is the latter statement? Is momentum nationally really moving in the right direction? Or has the Olympics played a role in propping up the national results? The following Table 3 considers the National performance exclusive of the GVA and Whistler markets.
As shown, without the GVA and Whistler, the 2010 over 2009 increase is no longer present and in fact the national RevPAR has continued to decline YTD March 2010 by a further 3.2% over the same period last year. If we compare the YTD March 2010 RevPAR against the same period in 2008, the market is 9.8% behind. Unfortunately the rest of Western Canada and Central Canada have not managed to turn the corner in Q1 2010. The only bright spot other than the GVA and Whistler has been Atlantic Canada, which YTD March 2010 posted a RevPAR increase of 2.7% as compared to the same year prior period. The following table outlines the YTD performances for the rest of Western Canada, Central Canada, and Atlantic Canada.
Although the immediate impact of the Olympics appears to have been positive for the GVA and Whistler markets, the long term impacts are yet to be seen. The legacy impact of the Olympics is anticipated to contribute to long term value for local business, tourism, and meetings related travel. The completion of the Vancouver Convention Centre and addition of several state of the art sports venues should present many opportunities to capitalize on this legacy effect.
Further, it will be interesting to monitor nationally how the positive impact of the 2010 Olympic results continues to be mitigated as the year draws out.
Matthew W. Cornell, Senior Consultant
PKF Consulting Inc., Toronto
