TORONTO—A steady economy and resurgent business traveler could turn Canada into the land of opportunity for hoteliers in 2011 and beyond.
The country will be in the spotlight next month during the Hotel Association of Canada’s Annual Conference 7 March at the Sheraton Centre Toronto Hotel.
In January, Canada posted a 2.7% increase in occupancy to 47%, flat average daily rate of CAD119.74 (US$121.69), and a 2.7% rise in revenue per available room to CAD56.34 (US$57.26), according to data from STR.
In 2010, the country’s occupancy increased by 3.5% to 60.9%, ADR was up 2% to CAD128.82 (US$130.91), and RevPAR increased by 5.6% to CAD78.48 (US$79.76), according to STR data.
“It’s a very screwy year to compare to,” said Jeff Doane, VP of hotel sales and marketing for Toronto-based Fairmont Hotels & Resorts, which has 20 hotels in Canada. He referenced the 2010 Vancouver Winter Olympics, and the G8 and G20 summits in Toronto helping boost overall numbers.
But while they occurred last year, Doane noted the “halo effect” from those events could entice the leisure traveler to Canada in 2011.
A growing pipeline
Canada, as of month-end January 2011, had a total of 194 projects in the development pipeline comprising 20,672 rooms, according to STR data.
Omni Hotels & Resorts currently has one property in Canada: the Omni Mont-Royal in Montreal. That number could increase, however, said Mike Garcia, Omni’s CFO and senior VP of acquisitions and development.
“We would like to have more hotels in Canada,” Garcia said. “We recently had a development trip to Edmonton, Canada. It’s a good feeder market.”
Ritz-Carlton last week announced the opening of the 267-room Ritz-Carlton, Toronto.
Garcia pointed to the growth in the country’s key hotel metrics as one reason Canada caught Omni’s eye. “It’s not on the way down,” he said. “It’s slowly on the way up now.”
Randy Smith, chairman of STR who will give a Canada update during the one-day conference, said the Canada market will see a slow and steady rebound in 2011. "Occupancies are still below pre-recessionary levels, but demand is moving in the right direction and unlike the U.S., room rates have rebounded and should continue to improve throughout the year," he said in an e-mail.
While there were big events in Canada a year ago that might have skewed the country’s metrics upward, there is still reason to believe the country will continue to see positive numbers.
The country was fortunate in that it did not see the dramatic downward swing as other countries did during the past 18 months, Fairmont’s Doane said.
“Canada had the No. 1-rated banking system in the world,” he said. “It didn’t get as involved in the financial crisis.”
Secondly, the country is seeing the return of the business traveler, particularly from the United States, he said.
“The U.S. is a big source market,” Doane said. “For a number of years, demand from the U.S. has been decreasing, but there (is now) a slight uptick from U.S. markets.”