STR: Canada hotel performance surpassed pre‑pandemic levels in January

January 2023 (percentage change from 2019)

• Occupancy: 50.7 per cent (+0.3 per cent)

• Average daily rate (ADR): CAD167.96 (+14.0 per cent)

• Revenue per available room (RevPAR): CAD85.11 (+14.2 per cent)

“Canada’s hotel industry started off the year on a high note, as performance came in above the 2019 benchmark,” says Laura Baxter, CoStar Group’s director of hospitality analytics for Canada. CoStar Group is the parent company of STR.

“Despite downward pressure on household disposable incomes, tourism spending remained elevated,” Baxter said. “People have chosen to prioritize experiences, including hotel stays, evidenced by transient demand that was nine per cent above the pre-pandemic comparable and showed no signs of pullback from the latter half of 2022. Meanwhile, group demand came in 14 per cent below 2019 levels but is expected to pick up momentum throughout the year as more typical patterns start to emerge and the industry benefits from events taking place that were cancelled earlier in the pandemic.”

Among the provinces and territories, Manitoba recorded the highest January occupancy level (64.3 per cent), which surpassed the pre-pandemic comparable by 20.9 per cent.

Among the major markets, Vancouver reported the highest occupancy level (63.9 per cent), which was 1.3 per cent behind 2019.

Prince Edward Island (36.3 per cent) saw the lowest occupancy among provinces, up 14.1 per cent against 2019. At the market-level, the lowest occupancy was reported in Edmonton (43.2 per cent) which was 6.4 per cent below the 2019 comparable.

“Typically, room demand declines in a recession, but STR’s latest forecast projects growth in 2023 with further demand rebound across all segments expected to push occupancy in line with the 2019 benchmark,” said Baxter. “The assumption that Canada will enter a moderate recession this year remains consistent, with GDP contracting 1.3 per cent. The bulk of ADR recovery took place in 2022, but with the industry laser-focused on the benefits of strong room rates, the forecast is set for the metric to remain ahead of 2022.”