A hospitality renaissance': Canadian hotel industry swiftly bouncing back as demand for experiences rises

Canada's hotel industry is experiencing a remarkable resurgence, marking its highest performance levels since September 2023. In May 2024, the sector reported an occupancy rate of 69%, a slight increase from the previous year. The Average Daily Rate (ADR) reached CAD$206.39, up 4.5%, leading to a Revenue Per Available Room (RevPAR) of CAD$142.32, a 4.8% rise.

This positive trend is expected to continue into 2024. CBRE Canada's market outlook forecasts a 4% year-over-year increase in RevPAR nationally. Vancouver is anticipated to see significant growth, with RevPAR projected to surpass $200 by the end of 2023 and reach $225 in 2024. Calgary and Edmonton are also set to benefit from Alberta's economic growth, with Calgary's RevPAR expected to exceed $100 by year-end.

However, the industry faces challenges, particularly in hotel construction. New hotel supply growth is projected at 0.9% of the total inventory, lower than the annual average of 1.5% recorded between 1998 and 2019. This slowdown is attributed to pandemic-related construction site shutdowns, supply-chain issues, and elevated construction and financing costs.

Despite these hurdles, the outlook remains optimistic. CBRE Hotels Director Nicole Nguyen notes that while the industry will continue to face cost pressures and uncertainty, the future still looks bright for the sector.

In summary, Canada's hotel industry is undergoing a significant revival, driven by increased travel demand and strategic market adaptations. While challenges persist, the sector's resilience and proactive strategies position it well for continued growth in the coming years.