Ottawa’s hotel bounceback to lag behind recoveries in Toronto, Vancouver, Montreal: report

Parliament Hill stock image
Parliament Hill stock image

Ottawa’s beleaguered hotel industry is expected to bounce back in 2022 as pent-up demand for travel sparks a tourism resurgence, but the capital’s road to recovery will be longer than those in most other major Canadian cities, according to a new report.

CBRE is projecting Ottawa’s average hotel occupancy rate to rise to 48 per cent next year, up from 30 per cent in 2020 and a forecasted 34 per cent in 2021, the real estate firm says in its annual hotel industry outlook released Tuesday. 

While that would put the capital ahead of Calgary, Edmonton and Winnipeg – which are projected to have occupancy rates in the low to mid-40s next year – it’s well below forecasted rates in Vancouver (55 per cent), Quebec City (55 per cent) and Toronto (52 per cent) and about on par with Montreal (49 per cent).

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The honeymoon mecca of Niagara Falls is expected to take top spot in the occupancy rankings at 59 per cent, down just eight points from 2019.

CBRE is predicting that Canadian hotels will be 50 per cent occupied next year, a significant improvement over last year’s figure of 30 per cent. 

Outlook brightening

Average hotel revenues per room plummeted 64 per cent across the country last year as the pandemic virtually ground travel to a halt, the firm noted in its report. But it said the outlook for the industry is brightening as COVID-related restrictions at tourist venues ease, borders reopen to foreign visitors, vaccine passports trigger increased mobility and business travellers start to hop on planes again.

Still, CBRE said the National Capital Region doesn’t stand to benefit as much from those potential tailwinds as most other major cities in Canada.

Revenues per room in Ottawa-area hotels are expected to jump by 50 per cent to $66 in 2022, CBRE says. That’s tied with Winnipeg for the third-lowest projected increase in the country, ahead of only Regina (42 per cent) and Saskatoon (34 per cent).

The top three centres for projected revenue growth are Quebec City (92 per cent), Montreal (88 per cent) and Niagara Falls (85 per cent). Overall, national revenues per room are expected to rise 53 per cent in 2022.

Vacation hot spots

Vancouver ($97) is projected to have the highest revenue per room in 2022, up from $47 last year but still well shy of its 2019 tally of $175. Quebec City ($92) and Niagara Falls ($87) are next.

CBRE hotels director Nicole Nguyen said properties in popular vacation spots such as Niagara Falls and Quebec City have seen revenues and occupancy rates rebound faster in the wake of loosened COVID-19 restrictions than downtown lodgings in larger urban centres.

“There has been some improvement in our downtown cores lately, but it’s still a long way from the typical (revenue per room) positioning for these hotels,” she said in a statement.

Even though it’s predicting the industry will take big strides back to health over the next 12 months or so, CBRE says it will likely be 2025 before average hotel revenues return to pre-pandemic levels.

While domestic leisure travellers have driven recent gains, “a more complete recovery in the industry will depend on the return of U.S. travellers and a resurgence of business travel, meetings and conferences, which is projected to begin ramping up in the spring next year,” the firm said.

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