WASHINGTON – 22 January 2024 – Canada’s hotel average daily rate (ADR) and revenue per available room (RevPAR) were the highest for any year on record, according to CoStar’s 2023 data. CoStar is a leading provider of online real estate marketplaces, information and analytics in the property markets.
2023 (percentage change from 2022):
- Occupancy: 65.7% (+7.7%)
- Average daily rate (ADR): CAD200.08 (+9.7%)
- Revenue per available room (RevPAR): CAD131.48 (+18.3%)
“Canada hotel room rate growth outpaced inflation in 2023, further cementing the hotel sector’s reputation as a strong hedge against the metric,” said Laura Baxter, CoStar Group’s director of hospitality analytics for Canada.
“Due to weakness in the broader economy, consumers have started reining in discretionary spending. For 2024, occupancy is forecasted to contract 1.4% in the first quarter and remain flat in Q2, with a return to positive territory in the latter half of the year. Driven by inflation, ADR is expected to grow throughout each quarter. Overall, the hotel sector should continue to outpace the wider economy but will not be entirely immune to weakening consumer and business demand. Fortunately, limited supply-side pressures should act as a cushion to support top-line hotel metrics as the broader economy faces challenges this year.
“The balance between supply and demand was favorable for Canada’s existing hotels, supporting the strong performance in 2023. Delivery of new hotels was down 53% compared to the previous peak in 2018, given limited groundbreakings during the pandemic and high development and financing costs. This kept supply-side pressure to a minimum. On the demand side of the equation, some hotels benefitted from demand spillover from the residential sector. Due to the lack of affordable housing and rentals, some hotels were used as housing. This dynamic between supply and demand is expected to continue into 2024, but softer RevPAR growth is certain, forecasted to grow 2.2%.”
Among the provinces and territories, Manitoba recorded the highest 2023 occupancy level (72.2%), which was 10.8% above 2022.
Among the major markets, Vancouver saw the highest occupancy (78.5%), up 7.8% over 2022.
The lowest occupancy among provinces was reported in Saskatchewan (58.0%), up 4.8% against 2022. At the market level, the lowest occupancy was reported in Edmonton (+9.4% to 56.6%).
“Strong key metrics and a positive outlook have resulted in more investment capital earmarked for hotels as opposed to other property types that have not performed as well,” said Baxter. “And since the development pipeline is still constrained due to high development and financing costs, and replacement costs are high, investors are focused on acquisitions as the most straightforward entry point.”
For more information about the company and its products and services, please visit www.costargroup.com.
Additional Performance Data
CoStar’s world-leading hotel performance sample comprises 81,000 properties and 10.5 million rooms around the globe. Members of the media should refer to the contacts listed below for additional data requests.
News Media Contact
Haley Luther
Communications Manager – STR
(216) 278-0627
hluther@str.com
About CoStar Group
CoStar Group (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics in the property markets. Founded in 1987, CoStar Group conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of real estate information. CoStar is the global leader in commercial real estate information, analytics, and news, enabling clients to analyze, interpret and gain unmatched insight on property values, market conditions and availabilities. Apartments.com is the leading online marketplace for renters seeking great apartment homes, providing property managers and owners a proven platform for marketing their properties. LoopNet is the most heavily trafficked online commercial real estate marketplace with over twelve million monthly global unique visitors. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X offers a leading platform for conducting commercial real estate online auctions and negotiated bids. Homes.com is the fastest growing online residential marketplace that connects agents, buyers, and sellers. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. Business Immo is France’s leading commercial real estate news service. Thomas Daily is Germany’s largest online data pool in the real estate industry. Belbex is the premier source of commercial space available to let and for sale in Spain. CoStar Group’s websites attract over 160 million unique monthly visitors. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time, we plan to utilize our corporate website, CoStarGroup.com, as a channel of distribution for material company information. For more information, visit CoStarGroup.com.
This news release includes "forward-looking statements" including, without limitation, statements regarding CoStar's expectations or beliefs regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that occupancy rates and average daily rates are not as expected. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar’s filings from time to time with the Securities and Exchange Commission, including in CoStar’s Annual Report on Form 10-K for the year ended December 31, 2022 and Forms 10-Q for the quarterly periods ended March 31, 2023, June 30, 2023, and September 30, 2023, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar’s other filings with the SEC available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
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