The Canadian hotel market is holding its own with annual occupancy at approximately 63.4% in 1999 and an average room rate of $94. Although our annual occupancy is comparable to that of the United States, our average room rate is approximately $10 higher, if you take our dollar at par. In BC, occupancy was roughly the same as the country as a whole 62.3%, with an average room rate of approximately $124. Alberta had an annual occupancy of 65.1%, with a $111 average room rate. Alberta�s higher occupancy can be attributed to the success of the Rocky Mountain Region, which had the highest market occupancy and average room rate in the country.

Hot spots in BC included the downtown Vancouver market, which achieved an annual occupancy of 71% at a $151 average room rate in 1999. Downtown Vancouver experienced an increase in RevPAR (revenue per available room) of 13.1%. This is during a period when most economists are projecting inflationary growth in the 2 to 3% range. This increase in RevPAR occurred in spite of the new 123-unit Sheraton Suites, which opened in March and the 207-room Westin Grand, which opened in April. The 446-room Delta Pinnacle Hotel opened in February, 2000. The only downtown hotel which sold in 1999 was the 233-room Pacific Palisades, which sold for $33,500,000, prior to renovations, capital improvements or $143,777 per room.

Whistler is another hot market, with 1999 annual occupancy at approximately 54% and an average room rate of $178. It is important to note that this occupancy is for all rooms in the rental pool. The full-service hotels are achieving occupancies in the low 70% range and one hotel had an average room rate close to $250. With the increase in RevPAR in Whistler between 1998 and 1999 was 23.5%, it is not surprising that the new 411-room Westin Resort in Whistler opened in April, 2000. The 292- room Delta sold in Whistler in 1999 for a reported $46,000,000, or $158,733 per room.
 

Another very hot market is the Alberta Mountain Region, which includes Banff, Lake Louise, and Jasper. In 1999, hotels in this area achieved an annual occupancy of 76.5% at an average room rate of $193. This is the best hotel market in Canada. The RevPAR increased by 14% between 1998 and 1999. New hotel development is not allowed in Banff; hence, hotel construction is moving into areas such as Canmore and Invermere. We are not aware of any hotel sales in this area in 1999.

The Vancouver Airport market is on the opposite end of the spectrum. Occupancy has declined from a high of 86% in 1996, to 69% in 1999, with an average room rate of approximately $94. The overall RevPAR declined by 0.3% in 1999 over 1998. New hotels that have opened include the Fairmont, Hilton, Marriott, Sandman, Hampton Inn, and Holiday Inn Express, just to name a few. Reportedly, the 100-room Quality Hotel at the Airport sold for approximately $9,000,000, or for $90,000 per room in 1999.

The Calgary hotel market declined from the mid 70% occupancy range in 1998 to 68% in 1999, with an average room rate of $111. The market RevPAR declined by 4% with a 9.8% increase in the competitive rooms supply. The Calgary Airport has been significantly impacted by the additions of new supply. In the downtown Calgary market, a 350-room Hyatt hotel is expected to open this year. There were no major hotel sales in the Calgary market in 1999.

Edmonton is a lackluster hotel market with a market occupancy rate in the low 60% range with an average room rate in the low $80 range. Edmonton has not experienced any major growth in the last few years. There are no major additions to supply expected. The 1999 Edmonton hotel sales include the 108-room Garden City for $3,750,000, or $34,722 per room, and the 50-room Winterburn Motor Inn, which sold for $640,000, or approximately $13,000 per room. The 64-room Super 8 in Nisku (Edmonton Airport) sold for $2,944,000, or $46,000 per room.

In our opinion, areas to watch in Western Canada include the resort/leisure areas. More people are traveling to Canada for our scenic surroundings, our friendly (hospitable) culture, our cleanliness, safe neighbourhoods, and most importantly, our weak dollar. The strength of the Canadian Rockies and the Whistler market areas are good examples of this trend. Other areas which have potential include Vancouver Island and the interior of British Columbia which provide golf, water activities, and beautiful natural scenic surroundings.

To summarize, what�s hot in the Western Canadian Hotel market is downtown Vancouver, Whistler, and the Rocky Mountain Region. We would be wary of the Vancouver Airport and the Calgary Airport market areas. Edmonton is also considered a stabilized market. In our opinion, downtown Calgary should hold its own, and the new Hyatt should help the existing hotels increase their average room rates.