Hotels to rebound to pre-pandemic revenues in 2023, two years ahead of forecast: CBRE

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TORONTO — Real estate firm CBRE says Canadian hotels will return to pre-pandemic revenues next year, two years ahead of its previous forecast.

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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.

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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.”

This report by The Canadian Press was first published Sept. 16, 2022.