Victoria is the “among the worst” hotel markets in Canada, while Whistler will see the biggest bounce back this year, according to analysts.
Whistler, Calgary, Fort McMurray and Banff will lead the hotel market in Western Canada in 2012, while the big losers will be Victoria, downtown Vancouver, Richmond, Winnipeg and Kelowna, when compared with Revpar (Revenue per available room) in 2011, according to HVS International. The remarks were made at the Western Hotel and Resort Conference in Vancouver this October.
“Whistler and Banff are coming off terrible years,” said Carrie Russell, HVS’s regional manager, based in North Vancouver. She expects Whistler to lead the market with a 15 per cent increase in Revpar this year.
Fort McMurray and Calgary, Russell said, are benefitting not from tourism but demand from the resource sector. “Calgary is off the charts,” she said.
“As far as Revpar is concerned, Victoria is among the worst markets in the country,” Russell said, due to a decline in both tourism and convention bookings.
Downtown Vancouver, at an average of $119, has the highest Revpar in Western Canada, she noted, but was down sharply from a very good year in both 2011 and 2010.
In a survey of the Western Canadian hotel market, presented by CBRE’s hotel division, the conference was told that Revpar is slowly improving across the western provinces.
British Columbia has an average hotel occupancy rate of 62 per cent, and an average hotel rack rate of $139 per night, while the Revpar has increased 3.4 per cent from a year ago.
Alberta is posting a 65 per cent hotel occupancy rate, the typical hotel sells for $123,000 per “key” and Revpar has increased 3.7 per cent since 2011.
Saskatchewan hotels are posting a 67 per cent occupancy rate, and hotels are a relative bargain, selling for an average of $40,000 per room.
Manitoba is seeing a 62 per cent occupancy in hotels – led by Winnipeg – and the typical hotel sells for around $61,000 per room. Revenues are forecast to increase in the 3 per cent range from Alberta to Manitoba, CBRE forecasts.
The hotel investment market has become rather buoyant, with real estate investment trusts getting into the market. Temple REIT, for example, recently bought four hotels, CBRE noted. Still, private investors account for 26 per cent of sales, with developers making up 46 per cent of the market.
