The country’s monthly hotel performance improved once again, while room rates reached the highest level since September 2019, according to STR’s most recent data from May 2022.
The data reveals that from May 2019 to May 2022, occupancy was down just 6.7 per cent, while the average daily rate was up 2.8 per cent.
“Overall, May was a strong month for Canada hotels, with many of the segments that have lagged in recovery showing real improvement,” said Laura Baxter, CoStar Group’s director of hospitality analytics for Canada. CoStar Group is the parent company of STR. “The main recovery driver is still strong leisure demand, as a surplus in household savings is being spent on travel and hotels. Weekend metrics therefore benefited and continued on an upward trajectory, with room rates reaching double-digit growth and occupancy returning to pre-pandemic levels for the first time. Weekday demand (Monday through Wednesday) continues to lag, while Thursday and Sunday, which are typically check-out days for corporate and leisure guests, respectively, are bouncing back quicker than the other weekdays. This could suggest that travelers are extending their weekend stay on either night, blending working remotely from a hotel with some leisure nights. Group demand once again reached a pandemic-era high in May, and as more large conferences and citywide events are taking place, we expect this number to climb again in June, which should benefit urban locations.”
Manitoba recorded the highest May occupancy level across Canada, 2 per cent above pre-pandemic numbers. The lowest occupancy level among provinces was recorded in Prince Edward Island, 11.8 per cent against 2019.
“Now that there are no longer government subsidies propping up the sector, hotels are fully reliant on stronger operating performance to service debt, and many are in a compromised state from the pandemic,” Baxter said. “However, Canada’s hotel performance outlook for the summer is tremendously strong. The most recent forecast for 2022 has been revised upward based on ADR rising quicker than expected. Rates are now expected to be at $167 this year, exceeding pre-pandemic levels in nominal terms next year. Occupancy is forecasted at 58 per cent and will come close to 2019 levels next year.”