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Will Salt Lake City Experience Apply to Vancouver and Whistler? June 2003 Year-to-Date The Canadian Lodging Outlook is a joint monthly publication of Smith Travel Research and HVS International, Vancouver and Toronto, Canada |
By: Jason McKay - HVS International - Vancouver
In February 2002, Salt Lake City, Utah, welcomed the world when it hosted the XIX Olympic Winter Games. A roster of 78 events drew almost 2,400 athletes, 22,000 volunteers, 77 National Olympic Committees, and over 8,000 media representatives. Vancouver was just awarded the 2010 Winter Olympic Games in July of this year. What can Vancouver and Whistler area hoteliers expect when the world is at their doorstep? The Winter Olympics are held over 16 days in February, every four years. Hosting the Winter Olympics is good news for hotels in the host city when, under normal circumstances, operating performance can be moderate at best during the month of February (mind you Whistler does extremely well already in February). For Salt Lake City, hosting the XIX Winter Olympic Games was a much-needed stimulus to a lodging market that was in decline. But exactly how much of an impact do the Winter Olympics have on an area's lodging market, and for how long? Most host cities seem to experience a vacuum in activity just prior to and immediately following the 16 days of actual competition that make up the Winter Olympics. Salt Lake City was no different. In the late 1990s, operating performance, defined in terms of occupancy rates and average daily room rates (ADR), began to decline in Salt Lake City. This was a result of the tremendous amount of construction and improvements undertaken throughout the city to prepare for the Games. Some of the downtown streets and portions of Interstate Highways were entirely unusable for extended periods of time. Occupancy and ADR declined 16% and 6% respectively in the month of January
(one month prior to the February Olympics), bringing rooms revenue per
available room (RevPAR) down 21% as compared to the same period in 2001.
This drop can be attributed to the traveler sentiment that it is better
to stay away from a city that is about to host the Winter Olympics, given
the flurry of activity involved in preparing the city.
However, in the following month (the month of the Games), the overall occupancy rate and ADR increased by 33% and 95% respectively over the same period in 2001, which jumped RevPAR to $140.00 - a 158% increase as compared to February of the previous year! In March, occupancy fell 34% from its high during the Games, which is a 25% decline from the same period in 2001. Again, the sudden drop year-over-year is indicative of the trademark vacuum of activity host cities experience before and after the 16 days of Olympic competition. Average daily rates also dropped by 51% from the time the Games were on, which is a decline of 7% over the same period in the previous year. After March, the changes in occupancy and ADR are not as dramatic; however, they still provide some insight as to what future host cities can expect. For the remainder of the year, occupancy returned to levels similar to those experienced before the Games, although there were some exceptions; in spring and fall, occupancy rates were 9% to 27% higher than in 2001. It should be noted, however, that comparing occupancy rates from the fall of 2002 to occupancy rates from the fall of 2001 isn't representative of normal market conditions because the effects of the terrorist attacks on September 11, 2001, skew the occupancy rates down for the fall of that year. Occupancy rates adjusted themselves as the year moved forward, making the real impact of hosting the Winter Olympics more evident. Average daily rates skyrocketed during the time the Games were on. From this high, ADR slowly eroded, but not as quickly as occupancy rates. Average daily rates maintained double digit growth (between 12% and 16%) in four of the nine months remaining in the year following the March lull, as compared to 2001. For the remaining five of the nine months, ADR still maintained growth, just not at a double digit pace. The prolonged buoyancy of ADR throughout the year helped keep RevPAR up year-over-year by 17% despite the rapid adjustment of occupancy to more normal levels. If Salt Lake City is any indication of what the Vancouver and Whistler
area hoteliers can expect, they should look for a dramatic swing in occupancy
and ADR surrounding the Games, including unprecedented highs during the
16 days of actual competition. Following the competition, occupancy
will turn itself around quickly while ADR will continue to grow, which
translates into the possibility of an inflated RevPAR for the year that
the Games occur. By years end 2010, operations should be back to normal
in Vancouver, with the prospect of future growth on everyone's mind.
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Month of
June 2003 |
Number
of Rooms |
Occupancy Rate 2003 | Occupancy Rate 2002 | Average Room Rate 2003 | Average Room Rate 2002 | RevPAR 2003 | RevPAR 2002 | Room Supply % Change | Room Demand % Change |
Nova Scotia Area | 1,693 | 66.3% | 68.7% | $86.04 | $86.26 | $57.04 | $59.23 | 0.8% | -2.7% |
Halifax, NS | 2,077 | 85.5% | 87.1% | $138.84 | $127.53 | $118.71 | $111.08 | 4.1% | 2.2% |
Montreal, QC | 14,644 | 75.2% | 80.4% | $169.91 | $170.73 | $127.77 | $137.27 | -0.3% | -6.7% |
Quebec City, QC | 3,804 | 73.1% | 78.8% | $152.33 | $156.77 | $111.35 | $123.53 | 0.0% | -7.2% |
Quebec Area | 3,381 | 60.1% | 63.6% | $97.55 | $98.14 | $58.63 | $62.42 | 0.0% | -5.4% |
Toronto Downtown | 11,418 | 54.7% | 78.8% | $149.08 | $187.04 | $81.55 | $147.39 | -4.5% | -33.7% |
Toronto North/East | 6,582 | 49.0% | 73.4% | $109.96 | $110.01 | $53.88 | $80.75 | 6.3% | -29.1% |
Toronto Airport/West | 6,541 | 54.0% | 68.5% | $102.82 | $113.03 | $55.52 | $77.43 | -1.1% | -22.0% |
Ottawa, ON | 8,270 | 71.6% | 73.5% | $128.82 | $130.49 | $92.24 | $95.91 | 0.0% | -2.6% |
Ontario East | 3,986 | 62.0% | 68.4% | $96.65 | $96.20 | $59.92 | $65.80 | 0.1% | -9.3% |
Ontario Southwest | 8,195 | 62.5% | 66.9% | $95.56 | $96.75 | $59.73 | $64.73 | 0.4% | -6.2% |
Ontario North | 5,095 | 64.3% | 65.7% | $96.90 | $104.67 | $62.31 | $68.77 | 0.3% | -1.8% |
Niagara Falls,ON | 7,049 | 63.2% | 74.2% | $112.89 | $127.80 | $71.35 | $94.83 | 0.6% | -14.4% |
Ontario Central | 7,875 | 60.2% | 70.2% | $98.75 | $100.78 | $59.45 | $70.75 | 2.3% | -12.2% |
Winnipeg, MB | 3,717 | 69.1% | 70.9% | $94.60 | $95.18 | $65.37 | $67.48 | 0.0% | -2.5% |
Regina/Saskatoon, SK | 3,863 | 62.5% | 68.2% | $87.93 | $85.28 | $54.96 | $58.16 | 0.0% | -8.3% |
Calgary, AB | 5,439 | 72.4% | 81.1% | $119.48 | $135.19 | $86.50 | $109.64 | 0.0% | -10.7% |
Edmonton, AB | 5,258 | 64.0% | 80.2% | $99.68 | $93.99 | $63.80 | $75.38 | 1.1% | -19.3% |
Alberta Area | 8,224 | 63.1% | 68.2% | $95.36 | $102.95 | $60.17 | $70.21 | 1.7% | -5.9% |
Mountain Regions, AB | 2,376 | 65.0% | 74.5% | $290.29 | $283.87 | $188.69 | $211.48 | 0.0% | -12.7% |
Vancouver, BC | 12,820 | 68.7% | 75.4% | $145.10 | $158.12 | $99.68 | $119.22 | 0.0% | -8.9% |
British Columbia Area | 7,648 | 49.9% | 56.3% | $101.25 | $111.64 | $50.52 | $62.85 | 1.2% | -10.3% |
Victoria, BC | 2,820 | 68.6% | 70.3% | $133.47 | $148.28 | $91.56 | $104.24 | 0.0% | -2.5% |
Provinces | |||||||||
Alberta | 21,266 | 65.9% | 75.1% | $124.77 | $129.45 | $82.22 | $97.22 | 1.1% | -11.4% |
British Columbia | 24,372 | 61.7% | 67.7% | $129.96 | $141.33 | $80.19 | $95.68 | 0.6% | -8.3% |
Manitoba | 4,103 | 68.5% | 69.8% | $92.91 | $93.69 | $63.64 | $65.40 | 0.5% | -1.3% |
New Brunswick | 2,970 | 66.7% | 69.8% | $103.34 | $98.91 | $68.93 | $69.04 | 0.0% | -4.4% |
Newfoundland | 1,521 | 78.9% | 78.0% | $121.01 | $116.47 | $95.48 | $90.85 | 0.0% | 1.1% |
Nova Scotia | 3,770 | 76.9% | 79.1% | $118.34 | $111.85 | $91.00 | $88.47 | 1.7% | -1.1% |
Northwest Territories | INS | INS | INS | INS | INS | INS | INS | INS | INS |
Ontario | 64,049 | 60.0% | 72.0% | $113.24 | $126.83 | $67.94 | $91.32 | 0.3% | -16.5% |
Prince Edward Island | 889 | 70.3% | 62.2% | $119.42 | $107.88 | $83.95 | $67.10 | 0.0% | 13.0% |
Quebec | 22,822 | 71.9% | 76.9% | $156.47 | $157.64 | $112.50 | $121.23 | -0.1% | -6.6% |
Saskatchewan | 5,062 | 60.7% | 63.5% | $82.52 | $80.03 | $50.09 | $50.82 | 0.0% | -4.5% |
Yukon Territory | 579 | 66.4% | 60.4% | $97.31 | $94.39 | $64.61 | $57.01 | 0.0% | 10.0% |
Canada | 151,403 | 61.0% | 67.7% | $111.63 | $116.04 | $68.09 | $78.56 | 0.4% | -9.6% |
CANADIAN LODGING OUTLOOK
HVS INTERNATIONAL - CANADA
June 2003 Year-to-Date
Year to Date |
Number
of Rooms |
Occupancy Rate 2003 | Occupancy Rate 2002 | Average Room Rate 2003 | Average Room Rate 2002 | RevPAR 2003 | RevPAR 2002 | Room Supply % Change | Room Demand % Change |
Nova Scotia Area | 1,693 | 52.0% | 54.2% | $78.14 | $77.23 | $40.63 | $41.86 | 0.3% | -3.9% |
Halifax, NS | 2,077 | 66.7% | 66.3% | $117.53 | $110.95 | $78.39 | $73.56 | 4.7% | 5.3% |
Montreal, QC | 14,644 | 60.8% | 63.5% | $136.11 | $138.44 | $82.75 | $87.91 | 0.1% | -4.1% |
Quebec City, QC | 3,804 | 58.9% | 61.5% | $122.19 | $123.01 | $71.97 | $75.65 | 0.0% | -4.3% |
Quebec Area | 3,381 | 52.1% | 51.5% | $87.60 | $84.97 | $45.64 | $43.76 | 0.0% | 1.2% |
Toronto Downtown | 11,418 | 52.1% | 64.2% | $141.30 | $162.58 | $73.62 | $104.38 | -1.5% | -20.1% |
Toronto North/East | 6,582 | 46.4% | 57.3% | $105.75 | $108.86 | $49.07 | $62.38 | 6.7% | -13.7% |
Toronto Airport/West | 6,541 | 59.9% | 66.0% | $106.57 | $113.10 | $63.84 | $74.65 | -1.6% | -10.7% |
Ottawa, ON | 8,270 | 62.3% | 62.2% | $126.63 | $127.10 | $78.89 | $79.06 | 0.9% | 1.0% |
Ontario East | 3,986 | 49.3% | 52.1% | $88.42 | $87.58 | $43.59 | $45.63 | 0.1% | -5.2% |
Ontario Southwest | 8,195 | 56.8% | 58.2% | $93.00 | $94.41 | $52.82 | $54.95 | 0.4% | -1.9% |
Ontario North | 5,095 | 53.6% | 53.0% | $88.28 | $88.62 | $47.32 | $46.97 | 0.3% | 1.5% |
Niagara Falls, ON | 7,049 | 45.8% | 50.3% | $98.31 | $104.67 | $45.03 | $52.65 | 0.2% | -8.7% |
Ontario Central | 7,875 | 54.1% | 58.4% | $97.50 | $97.39 | $52.75 | $56.88 | 2.3% | -5.3% |
Winnipeg, MB | 3,717 | 58.5% | 61.5% | $91.90 | $90.64 | $53.76 | $55.74 | 1.6% | -3.2% |
Regina/Saskatoon, SK | 3,863 | 59.0% | 60.6% | $86.63 | $83.94 | $51.11 | $50.87 | 0.0% | -2.5% |
Calgary, AB | 5,439 | 58.4% | 61.2% | $113.11 | $117.16 | $66.06 | $71.70 | 0.0% | -4.7% |
Edmonton, AB | 5,258 | 62.0% | 75.7% | $96.60 | $90.41 | $59.89 | $68.44 | 1.1% | -17.2% |
Alberta Area | 8,224 | 56.5% | 59.4% | $89.33 | $90.33 | $50.47 | $53.66 | 1.8% | -3.1% |
MountainRegions, AB | 2,376 | 57.9% | 62.9% | $194.12 | $185.07 | $112.40 | $116.41 | 0.0% | -7.9% |
Vancouver, BC | 12,820 | 57.0% | 59.9% | $122.33 | $127.12 | $69.73 | $76.14 | 0.0% | -4.8% |
British Columbia Area | 7,648 | 50.9% | 53.1% | $146.65 | $146.38 | $74.64 | $77.73 | 1.2% | -2.9% |
Victoria, BC | 2,820 | 57.1% | 58.8% | $107.78 | $109.28 | $61.54 | $64.26 | -0.2% | -3.2% |
Provinces | |||||||||
Alberta | 21,266 | 58.5% | 64.3% | $108.80 | $107.20 | $63.65 | $68.93 | 1.1% | -7.9% |
British Columbia | 24,372 | 54.8% | 57.4% | $124.57 | $127.20 | $68.26 | $73.01 | 0.6% | -4.0% |
Manitoba | 4,103 | 58.1% | 61.1% | $90.65 | $89.28 | $52.67 | $54.55 | 1.6% | -3.4% |
New Brunswick | 2,970 | 57.1% | 57.2% | $89.93 | $89.09 | $51.35 | $50.96 | 0.3% | 0.2% |
Newfoundland | 1,521 | 59.3% | 62.0% | $107.15 | $104.26 | $63.54 | $64.64 | 0.0% | -4.3% |
Nova Scotia | 3,770 | 60.1% | 61.2% | $102.38 | $98.27 | $61.53 | $60.14 | 1.5% | -0.2% |
Northwest Territories | INS | INS | INS | INS | INS | INS | INS | INS | INS |
Ontario | 64,049 | 53.7% | 59.2% | $109.32 | $116.75 | $58.70 | $69.12 | 0.7% | -8.6% |
Prince Edward Island | 889 | 42.2% | 41.3% | $84.63 | $80.96 | $35.71 | $33.44 | 0.0% | 2.3% |
Quebec | 22,822 | 59.0% | 60.8% | $126.78 | $128.29 | $74.80 | $78.00 | 0.0% | -2.9% |
Saskatchewan | 5,062 | 54.7% | 55.7% | $81.33 | $78.80 | $44.49 | $43.89 | 0.0% | -1.8% |
Yukon Territory | 579 | 41.3% | 38.8% | $80.80 | $78.59 | $33.37 | $30.49 | 0.0% | 6.3% |
Canada | 151,403 | 52.8% | 56.2% | $104.58 | $105.70 | $55.22 | $59.40 | 0.6% | -5.5% |
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