Hospitality Market Continues to Outperform Expectations

Summer travelers looking for hotel deals faced sticker shock this year as the majority of Canadian hotels and resorts shattered records for room demand and average daily rates and continued a three-year streak of higher-than-average growth for hotels and resorts throughout the country.

Central and Western Canada led the country with room revenue growth of ten percent, while Atlantic Canada experienced growth at a rate of six percent during in the first half of 2017. The Ottawa market led the country with a 13 percent increase in room revenue, largely driven by increased demand around the Canada 150 celebrations. Greater Toronto and Vancouver led other major markets, each with 12 percent room revenue growth (followed by Greater Montreal at 11 percent).

While much of the revenue improvement can be attributed to increased demand, strong occupancy levels have led operators to become much more aggressive on pricing. In Toronto, for example, the 12 percent increase in revenues was the result of 1.4 percent increase in demand, plus a ten percent increase in rates. In Vancouver, room rates increased by over six percent, while Montreal recorded 6.9 percent, and Ottawa showed a notable 9.4 percent jump. The record pace of these downtown markets is also creating spin-off benefits for many suburban markets as a result of overflow demand created by guests unable to secure a booking in the downtown market, or preferring a more economical option.

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