Canada’s hospitality sector experienced a phenomenal October 2024, achieving record-breaking occupancy rates and average daily rates (ADR). Data from CoStar, a leading real estate analytics platform, reveals an occupancy rate of 68.5%, a 0.8% year-over-year increase, and, for the first time ever, an ADR exceeding CAD 200, reaching CAD 200.59 – a 2.4% climb. This translated into a 3.2% surge in Revenue per Available Room (RevPAR) to CAD 137.32.
The impressive performance was largely driven by a significant increase in transient and weekday bookings, indicating a strong rebound in business travel. Regional performance varied across Canada. Nova Scotia led with the highest occupancy rate at 74.7%, although this represented a slight 0.3% decrease compared to the same period in 2023. Toronto, however, significantly outperformed other major markets, boasting a remarkable 79.6% occupancy rate – a substantial 3.5% increase year-on-year. In contrast, Prince Edward Island recorded the lowest provincial occupancy at 58.2%, while Edmonton had the lowest among major markets at 58.4%.
This remarkable growth paints a positive picture of Canada’s tourism and hospitality recovery. However, the forecast for 2025 offers a more nuanced perspective. STR and Tourism Economics have revised their RevPAR growth projection downward to 1.5%. While ADR is expected to increase in line with inflation, a slight dip in occupancy is anticipated due to the projected addition of approximately 6,000 new hotel rooms, potentially exceeding demand. The impact of elevated interest rates also presents a challenge, affecting both consumer and business spending. Despite this, a gradual increase in spending is predicted throughout 2025, particularly in the second half, driven by anticipated growth in both group and international travel.
The remarkable success of October 2024 underscores the resilience and adaptability of Canada’s hospitality sector. The industry’s ability to attract both business and leisure travelers, despite economic headwinds, signals a promising outlook, although the anticipated increase in hotel supply necessitates a careful balance between growth and managing occupancy rates to maintain profitability in the coming year. Further analysis will be crucial to understanding the long-term implications of these trends and the sector’s ability to sustain this momentum.
