The year 2010 was a year of recovery for the lodging sector, following the downturn during the global recession of 2009. Nationally, accommodation demand expanded by 4.7% in 2010, against a 1.3% increase in supply. Occupancy levels rose by 2 percentage points to reach 60% and national average daily rate increased to $128, representing a 2.1% increase over the previous year.
In our original 2011 forecast published in our December 2010 Trends issue, we projected both demand and ADR to be up nationally by 2.5% to reach a 61% occupancy at an ADR of $131. Overall, supply is forecast to increase by 1.7% in 2011. Based on year-to-date results and our outlook for the balance of the year, we are still forecasting a 1 point increase in occupancy. However, our national ADR forecast has been revised downwards, and is expected to be flat at $128 in 2011. As such, RevPAR is now forecast to reach $78 in 2011, which is about on par with 2006 levels.
MAJOR URBAN MARKET OCCUPANCY PERFORMANCE |
|
2008
Actual |
2009
Actual |
2010
Actual |
2011
Forecast |
Vancouver |
71% |
65% |
68% |
67% |
Calgary |
72% |
65% |
64% |
65% |
Edmonton |
73% |
65% |
62% |
62% |
Winnipeg |
69% |
64% |
68% |
68% |
Toronto |
66% |
61% |
66% |
67% |
Niagara Falls |
56% |
55% |
56% |
57% |
Ottawa |
70% |
66% |
67% |
69% |
Montreal |
64% |
59% |
64% |
66% |
Quebec City |
67% |
56% |
60% |
61% |
Halifax/Dartmouth |
67% |
63% |
64% |
64% |
CANADA |
63% |
58% |
60% |
61% |
In terms of occupancy, we have increased our original forecasts in 7 of the 10 major markets, including Vancouver, Calgary, Edmonton, Winnipeg, Toronto, Ottawa, and Montreal, by one percentage point. Our 2011 occupancy projections for Niagara Falls and Quebec City remain unchanged, while the occupancy performance in Halifax/Dartmouth is now expected to be flat.
In terms of rates, our 2011 projections for 7 of the major markets have been revised downward from our original projections, with no revisions made to 3 markets. The most notable adjustment has been in Vancouver, which is now forecast to achieve a $138 ADR in 2011 -- $4 below our original forecast. Edmonton is forecast to close the year at $120 - $3 below our original forecast, while Calgary, Toronto and Ottawa are each expected to be off by $2. Winnipeg and Halifax have also been revised downward by $1, with no changes to our original forecasts in Niagara Falls, Montreal and Quebec City.
MAJOR URBAN MARKET AVERAGE DAILY RATE PERFORMANCE |
|
2008
Actual |
2009
Actual |
2010
Actual |
2011 Forecast |
Vancouver |
$141 |
$132 |
$147 |
$138 |
Calgary |
$151 |
$144 |
$143 |
$145 |
Edmonton |
$123 |
$120 |
$120 |
$120 |
Winnipeg |
$111 |
$112 |
$116 |
$118 |
Toronto |
$136 |
$124 |
$127 |
$129 |
Niagara Falls |
$139 |
$132 |
$131 |
$134 |
Ottawa |
$136 |
$133 |
$132 |
$134 |
Montreal |
$138 |
$130 |
$135 |
$139 |
Quebec City |
$158 |
$138 |
$137 |
$140 |
Halifax/Dartmouth |
$129 |
$124 |
$124 |
$127 |
CANADA |
$131 |
$125 |
$128 |
$128 |
Of the 10 major markets, Montreal is forecast to achieve the highest RevPAR growth in 2011, increasing by over 7% to reach $92. Ottawa, Niagara Falls, Quebec City and Calgary are also projected to post healthy RevPAR growth of between 3% and 4% in 2011, while Winnipeg and Halifax are projected to witness moderate growth in the 2% range. Coming off strong results during the Olympics, Vancouver is expected to undergo a decline of 8% in RevPAR performance, from $100 in 2010 to $92 in 2011. Toronto’s 2011 results are expected to be weak, with a 1.5% growth in RevPAR resulting in a $86 RevPAR – a similar performance to that achieved in 2005.
MAJOR URBAN MARKET REVPAR PERFORMANCE |
|
2008
Actual |
2009
Actual |
2010
Actual |
2011
Forecast |
Vancouver |
$100 |
$85 |
$100 |
$92 |
Calgary |
$109 |
$94 |
$92 |
$95 |
Edmonton |
$90 |
$78 |
$74 |
$74 |
Winnipeg |
$77 |
$72 |
$79 |
$80 |
Toronto |
$90 |
$75 |
$84 |
$86 |
Niagara Falls |
$77 |
$72 |
$73 |
$76 |
Ottawa |
$96 |
$87 |
$89 |
$93 |
Montreal |
$88 |
$77 |
$86 |
$92 |
Quebec City |
$105 |
$78 |
$82 |
$85 |
Halifax/Dartmouth |
$86 |
$78 |
$79 |
$81 |
CANADA |
$83 |
$73 |
$77 |
$78 |
Fran Hohol, CMC
Principal
PKF Consulting Inc. Toronto
