Real estate firm CBRE says Canadian hotels will return to pre-pandemic revenues next year, two years ahead of its previous forecast.
The firm is projecting the Canadian hotels market will end this year at 92 per cent of the revenue per available room achieved in 2019, before the health crisis began.
It is forecasting moderate revenue growth will continue into 2023 as hotel operators push for higher room rates and projects revenue per available room will hit $107 next year.
Revenue per available room is a measure of a hotel’s performance calculated by multiplying its average daily room rate by its occupancy rate.
The $107 rate CBRE foresees will amount to a 70 per cent increase from the industry’s 2021 performance, which was hampered by health and travel restrictions meant to quell COVID-19 cases.
CBRE is also projecting half of the major urban markets in Canada are expected to see a revenue per available room above $100 in 2023, with Vancouver reaching $182, Montreal at $135 and Toronto hitting $129.
“Strong leisure travel and a rapid rebound in the average daily rate in many cities is producing a strong hotel performance. Overnight visits from the U.S. continue to recover, along with visitation from other key international markets,” said David Ferguson, CBRE’s hotels director, in a news release.
“However, travel from some key markets, notably the Asia/Pacific region, is still challenged. Cities and hotels that serve corporate travel, meetings and group travel face a slower recovery.”