Canada’s hotel performance was the highest of the pandemic era, according to STR’s June 2022 data.
Monthly hotel room rates were at an all-time high, and occupancy was its highest since September 2019.
“June was an exceptional month for Canada hotels, with RevPAR (revenue per available room) exceeding 2019 levels for the first time since the pandemic began, and, on nominal terms, reaching the highest level for any June on record,” said Laura Baxter, CoStar Group’s director of hospitality analytics for Canada. CoStar Group is the parent company of STR. “Notably, the RevPAR index across all location types was over 100, including at airport and urban hotels, for the first time since the pandemic started. The main driver of the RevPAR recovery is still ADR (average daily rate), which has been higher than 2019 levels for four consecutive months. Meanwhile, occupancy remains slightly below the pre-pandemic comparable, as a small gap in group and weekday demand is holding back the metric from full recovery. Despite the deficit, the rebound in group demand is also going from strength to strength, reaching 2.5 million room nights in June, compared to 2.9 million in June 2019. Group ADR also exceeded 2019 for the first time.”
Among the provinces and territories, Nova Scotia recorded the highest June occupancy level (79.7 per cent), which was 5.5 per cent above the pre-pandemic comparable.
Toronto saw the highest occupancy (84.4 per cent) among the major markets, which was a 0.9 per cent increase from 2019.
The lowest occupancy among provinces was reported in Alberta (62.1 per cent), down 2.1 per cent against 2019.
“The most recent data from Statistics Canada shows that international visitor numbers are well above 2021 levels but remain less than half of 2019 at 47 per cent, suggesting a huge opportunity for hoteliers to benefit from more international visitation,” Baxter said. “In mid-July, however, random testing for fully vaccinated inbound air travelers resumed, adding to the hassle of crossing the Canadian border. This change will likely add downward pressure to international demand recovery. Thankfully, the domestic market will keep hotel demand strong for the remainder of the summer, and anecdotal evidence suggests that the booking pace is strong into September. However, with rising interest rates and costs, discretionary spending from domestic leisure travelers will likely be increasingly scrutinized in Q4 2022 and Q1 2023. At that time, international hotel demand recovery, and other lagging segments, will be even more critical to replace any drop off in demand from the leisure segment, which has led the recovery thus far.”