Occupancy rates for Canadian hotels fell during the start of the busy summer travel season, but average daily rates and unit revenues grow solidly during the time period.
Through its Hotel News Now site, STR publishes weekly results for hotel performance in North America, and for the week of 26 May-2019 to 1-Jun-2019, Canada’s hotels posted 0.1% drop in occupancy rates to 72.2%. However, average daily rates increased 1.5% to CAD170.87 and revenue per available room (RevPAR) grew 0.5% year-on-year to CAD123.45.
Breaking down hotel performance by location, STR calculated Newfoundland and Labrador posted the highest rise in occupancy of 8.7% to 62%, but also the steepest decline in average daily rates, 8.2% to CAD131.97.
Ontario took the top spot for largest increase in average daily rate, posting a 5.6% increase to CAD173.45 while Saskatchewan posted the largest decline in RevPAR of 9.9% to CAD69.56, which STR stated was drive by the province posting the largest drop in occupancy of 8.7% to 57.6%.
Alberta posted the second largest drop in average daily rates of 4.5% to CAD145.52 and RevPAR, which fell 6% to CAD88.53.
Elsewhere in North America, across the border in the US, the global hotel performance tracker STR lowered its unit revenue hotel forecast for 2019 from 2.3% to 2%.
STR partnered with Tourism Economics to calculate hotel performance for this year, and the companies concluded that revenue per available room RevPAR for the US hotel industry grow by 2.9% in both 2018 and 2019, which was the lowest growth percentage change for the country since 2009. The revised 2% forecast for 2019 is markedly lower than 2018 and previous 2019 forecasts.
“The first quarter of the year came in worse than forecast on the ADR [average daily rate] side, and while the indicators point to better performance the remainder of this year, we lowered our RevPAR projection 30 basis points mostly as a result of Q1 performance,” explains Amanda Hite, STR’s president and CEO.
“The good news is that we continue to set monthly demand records, and occupancy has been a bit better than expected. Economic momentum is slowing, but consumer confidence and a low unemployment rate should aid more meaningful performance growth as we get into the busy summer months. Forward-looking US air travel bookings remain steady and vacation intentions are on the upswing compared to the two previous years,” she adds.
A majority of the US’ top 25 markets should register RevPAR growth of 1% to 3% for 2019, according to STR, with Atlanta, San Francisco and Tampa/St Petersburg posting growth between 3% and 7%. The five markets that are projected to post a RevPAR decline of 1% to 2% in 2019 are Houston, Miami, Minneapolis, Philadelphia and Washington, DC.