STR: Canada hotel results for January 2023

Canada’s hotel performance fell slightly from the previous month but surpassed the 2019 comparables, according to STR’s January data.  

For the month (percentage change from 2019):

  • Occupancy: 50.7 percent (+0.3 percent)
  • Average daily rate: C$167.96 (+14 percent)
  • Revenue per available room: C$85.11 (+14.2 percent)

“Canada’s hotel industry started off the year on a high note, as performance came in above the 2019 benchmark,” said 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 9 percent above the pre-pandemic comparable and showed no signs of pullback from the latter half of 2022. Meanwhile, group demand came in 14 percent 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 canceled earlier in the pandemic.”

Top Markets

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

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

Prince Edward Island (36.3 percent) saw the lowest occupancy among provinces, up 14.1 percent against 2019. At the market-level, the lowest occupancy was reported in Edmonton (43.2 percent) which was 6.4 percent 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,”  Baxter said. “The assumption that Canada will enter a moderate recession this year remains consistent, with [gross domestic product] contracting 1.3 percent. 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.”