Canada’s hotel industry reported a third consecutive month of occupancy declines but continued growth in average daily rate, according to CoStar’s February 2024 data.
February 2024 (percentage change from 2023):
- Occupancy: 58.0 percent (-1.6 percent)
- Average daily rate: CAD181.55 (+3.8 percent)
- Revenue per available room: CAD105.37 (+2.2 percent)
- Group ADR growth (+7.9 percent) was the strongest among the segments.
“Both transient and group occupancy declined, down 2.4 percent and 1.2 percent, respectively, contributing to the third consecutive decline in Canada’s monthly hotel occupancy,” Laura Baxter, CoStar Group’s director of hospitality analytics for Canada, said in a statement. “A greater decline in the metric occurred over the weekends as opposed to weekdays, suggesting that leisure travelers continue to reel in discretionary spending. Meanwhile, weekday occupancy was only marginally below last February, indicating that business travel is not pulling back to the same degree.
“Room rate growth, while slightly lower than January, continues to outpace inflation, but the gap between the two measures has narrowed. While group occupancy was down, group rates grew at a healthy pace year over year. The segment is becoming more lucrative and prevalent as group demand continues its recovery to pre-pandemic levels.”
Among the provinces and territories, Manitoba recorded the highest February 2024 occupancy level (69.8 percent), which was 0.5 percent below 2023.
Among the major markets, Vancouver saw the highest occupancy (73.5 percent), down 1.4 percent over February 2023.
The lowest occupancy among provinces was reported in Prince Edward Island (38.6 percent), down 38.1 percent against 2023. The decline was due to comparison to the province’s Canada Winter Games host period last year.
At the market level, the lowest occupancy was reported in Edmonton (+4.6 percent to 53.3 percent).
“Supply pressure continues to be minimal for most markets,” said Baxter. “New openings across Canada in 2024 are expected to be down roughly 30 percent compared to the 10-year average.”