Downtown Vancouver hotel market hit hard in 2012With predicted 15% Revpar increase, Whistler picked as top turnaround location
Downtown Vancouver is among the worst hotel markets in Western Canada, while Whistler will see the biggest bounce back this year, according to analysts.
HVS International says that Whistler, Calgary, Fort McMurray and Banff will lead the hotel market in Western Canada in 2012, while the big losers will be downtown Vancouver, Victoria, Richmond, Winnipeg and Kelowna, when compared with Revpar (revenue per available room) in 2011.
The remarks were made at the Western Hotel and Resort Conference in Vancouver in October.
“Whistler and Banff are coming off terrible years,” said Carrie Russell, HVS’ North Vancouver-based regional manager.
She expects Whistler to lead the market with a 15% increase in Revpar this year.
Russell said Fort McMurray and Calgary are benefiting not from tourism but from demand from the booming resource sector.
“Calgary is off the charts,” she said.
Because of its decline in both tourism and convention bookings Russell said Victoria is among the worst markets in the country for Revpar. Downtown Vancouver, at an average of $119, has the highest Revpar in Western Canada, she noted, but was down sharply from a very good year in 2011 and 2010. In a survey of the Western Canadian hotel market, presented by CBRE’s hotel division, the conference was told that Revpar is slowly improving across the western provinces.
British Columbia has an average hotel occupancy rate of 62%, and an average hotel rack rate of $139 per night, while the Revpar has increased 3.4% from a year ago.
Alberta is posting a 65% hotel occupancy rate, its typical hotel sells for $123,000 per “key” and Revpar has increased 3.7% since 2011. Saskatchewan hotels are posting a 67% occupancy rate, and hotels are a relative bargain, selling for an average of $40,000 per room.
Manitoba is seeing a 62% occupancy in hotels – led by Winnipeg – and the typical hotel sells for around $61,000 per room. CBRE forecasts that revenue will increase in the 3% range from Alberta to Manitoba.
The hotel investment market has become buoyant, with real estate investment trusts getting into the market.
CBRE noted, for example, that Temple REIT recently bought four hotels. Still, private investors account for 26% of sales, with developers making up 46% of the market.