Canadian Lodging Industry Overview - Hospitality & Gaming

DEMAND GROWTH The following chart shows the performance of the 10 major Canadian markets based on growth in demand over the first nine months of 2017 compared to the same period in 2016. Strong operating results have triggered increased development activity in many markets across the country. As asset values have risen, new construction may be a more appealing option. New development offers an opportunity to enter markets with new and modern products which will often outperform their competitive set. The majority of new development across the country is in the upscale and upper midscale category, most of which is made up of suburban, focused service hotels.

Canadian Demand Growth, by Major Market – Year-to-Date September 2017

10%

8%

6%

4%

2%

0%

-2%

-4%

Demand

Source: STR Republication or Other Re-Use of this Data Without the Express Written Permission of STR is Strictly Prohibited

Winnipeg leads the country in terms of demand growth after the first nine months of the year, reaching 9.8% compared to the same period in 2016. Perhaps surprisingly to some, Calgary came second at 5.3%, although Calgary remains burdened with new supply issues. Ottawa reported a strong 5.1% demand growth, driven in large part by the 150th anniversary celebrations, somewhat mirrored by the celebrations in Montreal and Quebec City – both at 3.4%. Toronto and Vancouver had very low levels of demand growth at 0.3% and 1.0%, respectively, with further growth constrained by their strong occupancy performance and capacity constraints

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