Looking ahead
Following the strong summer performance, hoteliers will need to focus on booking pace for fall and winter months when performance is typically derived from corporate travel and group bookings. Throughout the spring and summer, a return of corporate conferences such as Collision and PDAC (in Toronto) as well as major events such as the Calgary Stampede and the Montreal’s Canadian
Grand Prix have enhanced recovery. However, the first and fourth quarters of the year are typically the weakest-performing quarters in many markets. STR has forecasted a drop in performance during the fall as this is typically a time for business travel which hasn’t yet come back to the same extent as leisure. STR’s projections depict strong performance nearly on par with pre-COVID-19 levels.
Occupancy (actual and forecast) 2019/2022/2023
RevPAR (actual and forecast) 2019/2022/2023
Laura Baxter, Director of Hospitality Analytics – Canada for STR, comments: “Based on stronger-than-anticipated occupancy and ADR growth and a positive outlook for the rest of the year, the most recent full year forecast for 2022 prepared by STR and Tourism Economics has been revised upwards, with nominal RevPAR expected to reach 2019 levels this year. Both occupancy and ADR have been upgraded with occupancy expected to rise 18 percentage points in 2022 compared with 2021 to 59.9%, while ADR is forecast to grow 28.4% to $179. "Looking ahead to 2023, we are expecting a period of sustained growth with further year-over-year improvements, albeit at a much slower pace than in 2022. Occupancy is expected to rise by 4.6 percentage
points to 64.5% while ADR is forecast to grow 4.3% to $186. "On a quarterly basis STR has predicted Q4 2023 to surpass Q4 2019 in occupancy with 59.6% compare to 59.2%, while Q2 2023 is predicted to out perform Q2 2019 with $127.10 compare to $113.99." In the fall 2022 and winter 2023, the typical seasonal drop-off will ensue, and we are expecting aspects of the business mix to change, with different components of pent-up demand like group and business travel to benefit hotels while other segments such as transient leisure somewhat taper off. Baxter’s remarks indicate some of the reasoning behind STR’s positive sentiment about what lies ahead for the hospitality sector.
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Curtis Gallagher* Principal, Canadian Hospitality Lead +1 416.673.4018 curtis.gallagher@avisonyoung.com
Jolene Keats Director Eastern Canada Hospitality +1 902.579.1245 jolene.keats@avisonyoung.com
Haig Basmadjian Senior Associate Western Canada Hospitality +1 403.232.4316 haig.basmadjian@avisonyoung.com
Bobby Singh* Associate Eastern Canada Hospitality +1 905.283.2326 bobby.singh@avisonyoung.com
Graeme White* Associate Eastern Canada Hospitality +1 647.598.2318 graeme.white@avisonyoung.com
*Sales Representative
© 2022 Avison Young Commercial Real Estate Services, LP, Brokerage. All rights reserved. E. & O.E.: Some of the data in this report has been gathered from third-party sources and has not been independently verified by Avison Young. Avison Young makes no warranties or representations as to the completeness or accuracy thereof. Investment sales and hotel market data sourced from Avison Young, Altus Data Studio and STR.