If 2021 was widely considered to be a lost year, with only a minimal recovery from the impacts of COVID, then 2022 should be deemed the year, of the bounce back. In 2021, national Revenue Per Available Room (RevPAR) growth was 47 per cent, increasing to $57, which on a relative basis was only 54 per cent of 2019 RevPAR. Occupancy finished at 42 per cent, with about $7 of Average Daily Rate (ADR) growth over 2020. Aside from the summer and early fall, which saw strong leisure demand, the balance of the year was only moderately better than the last two quarters of 2020.

Heading into 2020, the accommodation industry in Canada was operating at peak performance levels, running 65 per cent occupancy with an ADR of $163 and a RevPAR of $106. Similarly, operating profits were at peak levels in the range of $$15,000 PAR. The industry’s growth over the 2015 to 2019 period was fuelled by moderate supply growth, strong demand growth and national ADR growth of four per cent on a compounded annual basis. There was strong domestic and international visitation taking place and Canada’s reputation as a destination for both corporate and leisure travel was growing. According to Destination Canada, at the end of 2019, tourism spending in Canada was $105.1 billion, of which $82 billion was generated by domestic spending.

With the impacts of COVID in 2020, the industry saw the single-biggest year of declines, with RevPAR nationally falling by 64 per cent to just $39. Occupancy was 30 per cent, with the almost complete shutdown of travel from all demand segments. Rate declined by 21 per cent to $128, effectively wiping out all rate growth the industry had realized since 2013. CBRE’s Annual Trends 2021 report indicates that, in general, operating profits fell to $800 PAR.

Heading into this year, the expectation was that 2022 would see incremental recovery of occupancy and ADR and, ultimately, RevPAR. The recovery of occupancy was expected to come from more diversified segmentation, more traditional seasonality patterns and ADR growth from rate yield generated by segmentation and seasonal pricing pressures. The expectation was that through the year there would be a steady, month over month improvement in the top-line metrics and that the gap to 2019 RevPAR would narrow. After a bit of a slow start in January and February with the Omicron wave, RevPAR recovery month to month has accelerated sharply and beginning in June has hit 100 per cent of 2019 levels.

CBRE’s current forecast is for 2022 to be a year of unparalleled recovery, with a sharp V-shaped curve becoming apparent. The industry is projected to see RevPAR growth of 70 per cent in 2022. This growth will result in a RevPAR of $97, rebounding to 91 per cent of 2019 levels.

Previously, when the industry has recovered from a demand shock-driven downturn, the recovery has been led by a relatively rapid return of demand levels (typically one to two years) with ADR recovery taking several more years to return to the prior peak (typically three to four years) with total RevPAR rebound taking between four and six years.

However, based on the current market dynamics, it appears the industry’s recovery from COVID will be anything but typical — in fact, this time around everything is turned upside-down. At the end of 2022, ‘forecast that demand growth will be 40 per cent, increasing occupancy nationally to 59 per cent. While occupied room nights will be approximately 91 per cent of 2019 levels, this will leave more than 9.3 million occupied room nights still to be recovered.

The biggest surprise to the recovery in 2022 has been the strength of ADR, which is forecast to be up by 22 per cent, finishing the year at $165, approximately 101 per cent of 2019 levels. In general, ADR in tertiary and resort markets has been at or above 2019 levels since the start of the year, while downtown, airport and secondary markets have only seen rates-exceed 2019 levels since about May. However, pricing in these markets through the peak summer season will more than offset any lag from the early part of the year.

Operators have been able to drive significantly higher-than-expected ADR levels for myriad reasons, including general economic inflationary conditions, very high levels of leisure demand due to pent-up travel desire and excess discretionary income, as well as both direct and indirect capacity constraints due to labour shortages in the hospitality, tourism and related industries. While these conditions have been favourable, it is unlikely that this level of ADR growth can continue over the longer term.

Capacity Constraints: A Short-Term Issue or Here to Stay?
As discussed, national occupancy is expected to rebound in 2022 to 59 per cent, which is about six points behind the 2019 occupancy. Since early spring, there has been considerable discussion about labour-market conditions and impact it’s having, and could continue to have, on the industry’s recovery. According to Statistics Canada, as of July 2021 there were more than 300,000 job vacancies in the Accommodation and foodservice sector, while the overall unemployment rate in Canada remains at a record-low 4.9 per cent. Many operators have indicated they’re having to restrict capacity (i.e. available rooms) in order to ensure their ability to service guests and turn over rooms on departure.

At this point, it’s not possible to quantify the exact extent to which this restricting of capacity could be limiting the ability to capture additional occupied room nights, as this is being done at the property level in most cases on a week-to-week basis. To this point, the restricted capacity has been mostly favourable as it has allowed operators to drive rate yield on the demand they are able to accommodate. However, as other demand segments with negotiated or contracted rates this dynamic will likely shift.

While some relief is expected to come from Canada’s increased immigration targets and the recent changes to the foreign-workers program, there are several other industries where there are high levels of job vacancies, which will compete for new workers with the accommodation sector. As such, it’s unlikely the labour challenges will subside quickly, and this may be an issue that persists for the next several years. It will be necessary to evaluate the impact of restricted capacity on the industry’s ability to ramp-up occupied room night demand back to 2019 levels.

Recovery to 2019 Levels: Is it the right benchmark?
Historically, when judging or benchmarking the industry’s recovery from a downturn, it’s been with a view to getting back to the prior peak. After surviving the initial months of COVID, the discussion turned to what the recovery could or would look like. For most industry participants, it was about how long it would take to get back to 2019 performance levels, which for most of the markets across the country represented peak performance. With 2022 national RevPAR expected to be 91 per cent of 2019 and ADR expected to be 101 per cent of 2019, should the industry begin to consider another benchmark when talking about recovery?

For most properties, getting back to 2019 levels is the focus of revenue-management and sales strategies. However, this approach doesn’t consider basic — or in the case of 2022 — historically high, inflation levels and their impact on operating costs and profitability levels.

Simply, ignoring COVID and assuming that the national market was stabilized in 2019, if ADR grew by 2.5 per cent per annum, the ADR in 2022 would have been $176. The current forecast has ADR recovering to $165 in 2022, which although ahead of 2019, is more than $11 behind the inflation-adjusted ADR.

In order to close the gap, bringing actual ADR in line with the inflation adjusted ADR would require rate growth of approximately nine per cent nationally in 2023.

If this could be achieved, it would mitigate some, but not all, of the impact of the escalation of operating costs the industry is facing. According to TD Economics, inflation in Canada was 3.4 per cent in 2021 and is estimated to be approximately 6.7 per cent in 2022. While there is not a direct correlation between the overall inflation rate and hotel operating costs, there is a strong relationship in that as inflation accelerates, so do the costs associated with many of the more significant expenses (i.e. utilities, food costs, labour costs, operating supplies, et cetera), putting pressure on bottom-line profitability.

While there are many reasons to be optimistic about the current trajectory of the recovery for the industry, with RevPAR within less than 10 per cent of 2019 levels, it may be prudent for industry participants to also be tracking recovery relative to an inflation-adjusted ADR to facilitate a quicker recovery of profitability levels.

By CBRE Hotels and CBRE Tourism Consulting

Heading into 2022, it was widely expected that this year would be a rebuilding year for the industry. The opening of the Canadian borders to both U.S. and overseas visitors, along with the easing of testing and quarantine requirements, was expected to have an immediate, positive impact on travel conditions. In addition, most provinces and territories had, or were, rolling back gathering limitations and implementing “re-opening” plans aimed at getting people back to their regular routines and the economy operating at full capacity.

In reality, 2022 has been another unprecedented year — but for all the right reasons. Although the first couple of months of 2022 were challenged by the Omicron wave, with occupancies and Average Daily Rates (ADRs) well below pre-pandemic levels, as early as March the industry started to see a meaningful shift in performance and sentiment. Since then, there has been good growth in occupancy month-over-month and, in general, summer occupancy levels will be within 10 or 15 points of pre-pandemic levels.

The bigger surprise has been the strength of the rebound of the ADR. In many of the markets across the country, starting in March or April, ADRs reached or exceeded 2019 ADRs for the same month. This trend has carried into the summer months, where operators have been able to drive a premium over 2019 levels. Many operators are reacting to the strong demand levels and increases in operating costs by instituting aggressive pricing strategies. As a result, overall ADR in many markets for year-end 2022 is projected to be in the range of, or exceed, 2019 levels. However, the slower pace of the occupancy recovery will be the mitigating factor to achieving full RevPAR (Revenue Per Available Room) recovery in 2022.

It is against this backdrop that CBRE has prepared its 2022 Market Forecast.

Major Market Outlooks

Canada’s major markets account for more than 42 per cent of all rooms across the country and have a significant influence on the national performance for the industry year to year.

In every one of Canada’s major metro markets, the forecast is for robust RevPAR growth in 2022 as compared to 2021 results. By and large, the major metro markets will see RevPAR levels recover to 85 to 95 per cent of 2019 levels with ADR playing a leading role as demand segmentation growth is uneven.

Guestroom demand levels across Metro Vancouver are improving from many different sources, notably domestic corporate and leisure travellers. Demand from the United States is growing in sizeable volumes thus far in 2022.

While total passenger volumes at Vancouver International Airport are still below pre-pandemic levels, the growth month-over-month in 2022 has been robust. After a two-year pause in the cruiseship sector, the sailing season has resumed, and more ships are expected through Port Metro Vancouver in 2022 than in 2019. Film and television production, which has emerged as a significant source of overnight accommodation demand across Metro Vancouver, is currently robust.

Guestroom demand levels in the suburban markets is strong thus far in 2022. Demand is being generated significantly by local sources, rather than just through compression from the downtown Vancouver market. Participation in tournaments and other competitions in the suburban markets are examples of demand sources that are generating strong overnight accommodation levels in 2022. Overnight travel from Asian markets has been cited as an example of a historic demand source that is not returning to pre-pandemic levels in 2022. Some markets, including China, are continuing to contend with pandemic-related restrictions that are impacting outbound international travel.

Room supply is expected to remain relatively flat in 2022, after seeing net declines in inventory in both 2020 and 2021, with several properties having been converted to alternate uses. Room demand is projected to increase by 49 per cent for the year, increasing occupancy to 71 per cent, up 23 points from 2021. Many accommodation operators have been implementing room-rate increases in 2022 that are helping generate strong ADR performance. ADR growth of more than $60 is projected for year end 2022. RevPAR for Metro Vancouver is projected to more than double in 2022, growing from $79 to $161, which puts it within 92 per cent of the pre-pandemic performance in 2019.

Strong energy prices in the current year are leading to a surge in the economic performance of the Alberta economy, which is contributing to improved performance in the accommodation sector in many areas of the province, including Calgary. The province will record its first fiscal surplus since 2014/15. The boost in energy prices contributes to improved consumer-confidence levels, which in turn supports growth in overnight travel to Calgary from numerous demand sources.

Despite the strong energy sector, many firms remain cautious with regard to capital-spending initiatives and their employment levels. As a result, while the volume of foot traffic on weekdays in downtown Calgary is reportedly up considerably, the office-space vacancy rate remains above 30 per cent. The impacts are still being felt particularly in the downtown accommodation market. Conversely, demand for industrial space is very strong in and around Calgary and is contributing to increases in room demand in the suburban submarkets.

The return of the Global Energy Show, the first held in the city since 2019, along with better attendance for the 2022 Calgary Stampede, are positive indicators of increasing visitation to the city, which leads to stronger occupancy performance.

Overall occupancy for the Calgary market for 2022 is projected to reach 55 per cent, up from 33 per cent in 2021. With demand levels across many demand sources improving, many accommodation operators have become more aggressive with room pricing. ADR growth in the range of 23 per cent is projected for 2022, reaching $146. This is in line with the ADR achieved in 2018 and 2019. RevPAR in Calgary is projected to double the 2021 figure.

As with Calgary, the strong energy sector in Alberta in 2022 is generating significant improvements in economic performance within the Metro Edmonton area. Many firms that are involved with oil-and-gas operations and development have seen increases in demand for their products and services thus far in 2022. The stronger performance in the energy sector also generates increases in consumer expenditures on leisure travel. This bodes well for the accommodation sector in Edmonton, as travellers from around the province visit the city to attend events, shop and enjoy other leisure activities.

The Greater Edmonton accommodation market saw strong annual increases in guestroom supply in each year of 2015 to 2020. More than 3,000 new rooms opened during this period. Room-demand growth did not match this pace and occupancy levels fell across the Metro area. Many operators reacted by lowering room rates in an effort to retain market share. Guestroom supply growth has been minimal in 2021 and 2022. The improved demand levels coupled with stable supply is projected to result in market occupancy increasing by 17 points in 2022, to 51 per cent. Events such as the strong playoff run by the Edmonton Oilers and the Pope’s visit are examples of the strong growth in overnight travel to the Metro area. Operators have been aggressive with pricing, and this is projected to lead to 2022 ADR reaching $122, up from $100 in 2021. Overall, RevPar for the Metro Edmonton accommodation market is projected at $63 in 2022, up from $35 in 2021.

The accommodation market in Regina is experiencing strong growth in room demand from a variety of sources in 2022. Provincial officials have undertaken measures since Q2 2021 aimed at “re-opening” Saskatchewan to business and leisure activities that have seen increases in domestic overnight accommodation demand. This has ranged from business travel to those attending meetings/conferences to residents participating in events. Room demand in Regina is projected to increase by 45 per cent in 2022, with occupancy reaching 50 per cent, up from 35 per cent in 2021. Room demand in 2022 remains well below pre-pandemic levels. Many sources of corporate demand and meeting/conference demand are still not projected to generate room-night volumes in 2022 that are comparable to pre-pandemic levels. Regina will host Grey Cup 2022 in November and this will help boost both occupancy and ADR for the city.

Regina’s accommodation market had annual ADR in the range of $120 to $121 from 2017 to 2019. In 2022, the ADR is projected to return to this level, after decreasing to $102 in 2021. Overall RevPAR for the Regina market is projected to increase to $61 in 2022, up approximately 72 per cent from the 2021 RevPAR.

Overnight travel to Saskatoon is generated primarily from domestic sources from within Saskatchewan, plus neighbouring provinces. Improvements in energy prices in 2022 and strong demand levels for other resources such as potash and key crops are contributing to improved economic performance for Saskatchewan and overnight travel to major centres including Saskatoon.

Guestroom demand in 2022 is projected to increase by 38 per cent, leading to occupancy at 54 per cent, up from 39 per cent in 2021. Guestroom supply in Saskatoon increased by net annual amounts of more than 100 guestrooms in each of 2015 to 2021 inclusive. In 2022, supply is projected to be flat. This coupled with the strong room-demand growth both contribute to the projected improvement in occupancy performance.

The strong room-demand growth is leading operators to be more aggressive with room pricing in 2022. ADR is projected to increase by roughly 15 per cent, to $126 in 2022, up from $110 in 2021. Overall, RevPAR in Saskatoon is projected to improve by approximately 58 per cent in 2022, to $68.

Strong demand for commodities produced in Manitoba, including crops, minerals and oil and gas are leading to GDP growth projected at more than 3.5 per cent for 2022. This bodes well for economic performance in Winnipeg, where many firms have a base of operations. In addition, the strong economic performance also leads to overnight travel to the city from numerous sources, including leisure travellers. A particularly heavy spring flood in some areas of the province led to some evacuees moving into overnight accommodation in Winnipeg, which resulted in an uptick in occupancy.

Overall occupancy is projected to increase to 63 per cent in Winnipeg in 2022, up from 40 per cent in 2021. Guestroom supply in Winnipeg will increase moderately in 2022. The increases in overnight travel, including from domestic corporate, leisure and government sources, is helping operators generate sizeable increases in ADR. Overall ADR for Winnipeg for 2022 is projected at $133, up from $118 in 2021. RevPar is projected to increase to $84 in 2022, up from $47 in 2021.

The Greater Toronto Area (GTA) continues to see a rebound in economic and tourism activity in 2022, particularly after the easing of the remaining travel and gathering restrictions following the Omicron wave. Most notably, the downtown market has seen a strong return of domestic and international leisure travel and a ramping up of corporate, government and meeting/conference travel. These factors are also helping to drive performance in the other suburban Toronto markets.

Overall room demand for the GTA market is projected to increase by approximately 45 per cent in 2022. In 2020 and 2021, the region generally saw flat room supply, with permanent closures off-setting new openings and other projects delayed or pushed out. In 2022, supply in the GTA is expected to increase by almost 2.5 per cent, with a little less than 1,100 new rooms opening. Overall occupancy in the GTA is projected to increase by 18 points to 62 per cent in 2022.

At the end of 2021, the market had seen two years of ADR declines, falling 30 per cent, or $54, from 2019 levels. As noted earlier, strong leisure demand and rate yield has been the driving force behind the very strong ADR recovery. While the downtown market will lead ADR growth in 2022, the suburban markets are also expected to see strong double-digit ADR increases. Overall, it is expected ADR for the GTA will increase by an estimated 40 per cent, or about $52, in 2022. The significant improvements in both occupancy and ADR are expected to contribute to a RevPAR improvement of approximately $57, or 99 per cent for 2022.

Niagara Falls
Niagara Falls is one of Canada’s predominant destination leisure markets, with travellers from across the country and around the world visiting each year. The market performance in 2020 and 2021 was severely impacted by the border, travel and gathering restrictions. As soon as the restrictions were lifted and eased, there was a noticeable increase in demand in the market with the return of higher-rated U.S. individual and group (i.e. tour) travel.

The market is not expected to see any new supply in 2022, but there will be a minor contraction in supply as properties that transacted for alternate use exit the market. Market demand for Niagara Falls is projected to increase by 59 per cent in 2022, pushing occupancy up 20 points to 52 per cent this year. Month-over-month demand growth in the market is being driven by cross-border and domestic visitation, while overseas visitation is taking longer to rebound. The market has consistently been commanding ADRs well in excess of 2019 levels since the beginning of the year and the premium has continued to increase through the summer months. The market is projected to see ADR grow by 21 per cent, or $33, improving to $189 — more than $21 ahead of 2019 levels. As a result, Niagara Falls is projected to achieve RevPAR growth of 93 per cent, improving to $98 in 2022.

Ottawa, as the seat of the federal government, is typically a government and meeting/conference market with a good base of leisure travel. Accommodation demand in Ottawa has seen strong growth since Ontario implemented its re-opening plan and eliminated gathering restrictions. Following the federal election in late 2021, demand from government and meeting/conference has improved. The market has also seen strong growth in leisure demand since the spring as events, such as the Canada Day celebrations, returned. Heading into the fall, all sources of demand in the market are expected to continue to ramp up activity and drive overall demand levels. As a result, in 2022, accommodation demand in the market is expected to grow by 43 per cent. With no real change in supply — new openings will be off-set by permanent closures — market occupancy is projected to improve by 18 points to 59 per cent, in 2022.

Market ADR is projected to improve by 24 per cent, or $32, to $163 in 2022. The strong ADR growth has primarily been driven by the leisure demand and periods of compression. The downtown and west markets are leading the overall market in terms of ADR growth. As a result of the very good growth in both occupancy and ADR, market RevPAR is expected to finish at $95, a 77-per-cent, or $41, improvement over 2021.

The Greater Montreal Area saw some of the most significant impacts during 2020 and 2021 due to the extensive provincial government restrictions, as well as the broader border closures nationally. In the latter part of 2021, the market saw some initial demand improvement as the borders re-opened and restrictions were eased. In general, Montreal sees strong demand from U.S. and international leisure travelers. This demand came back quickly, beginning in early 2022, and has continued to be the most significant source of demand this year. Montreal also benefits from a well-diversified economy, which is helping to bring back corporate and meeting/conference demand. It is expected that these segments will play an even greater role in the demand recovery in the last two quarters of the year.

Overall, demand in 2022 across Montreal is projected to increase by approximately 83 per cent. The growth will be led by increasing demand in the downtown sub-market, which was hardest hit during the lockdowns and restrictions. Supply in Greater Montreal is projected to grow 1.8 per cent in 2022, driven primarily by a number of projects downtown. Overall occupancy in 2022 is forecasted to be 59 per cent, up 26 points over 2021.

In Montreal, leisure demand has been the primary driver of rate growth — a trend expected to influence the full-year performance. In the Montreal market, ADR is projected to grow by approximately 28 per cent, or $43, in 2022. This will increase market ADR to $195, putting it $11 ahead of 2019 ADR. On the strength of the occupancy improvements and the ADR growth, RevPAR for the overall Metro Montreal market is projected to increase by 131 per cent in 2022, or approximately $65, to $115.

Quebec City
Similar to Montreal, Quebec City saw significant challenges in 2020 and 2021 as a result of the provincial government restrictions as well as the broader border closures nationally. Additionally, once the restrictions were eased and borders re-opened, Quebec City saw almost an immediate improvement in demand. Year-to-year, Quebec City sees demand generated by meeting and conference and government sources as well as leisure- particularly in the summer season.

In 2022, the market has benefitted from a return of major festivals and events, as well as meeting and conference activity and leisure travel. These segments are expected to continue to ramp up over the last months of the year. There are no significant supply changes to note in 2022, with the estimated supply increase of just under one per cent, for the year.

It’s expected that the market will see a 71-per-cent increase in demand in 2022, pushing occupancy up more than 24 points to 57 per cent for the year.

With the demand pressures in the market, operators have been driving rate yield and ADR is expected to increase by 22 per cent in 2022, growing by $36 to $200. The strong growth in both occupancy and ADR will result in a 107-per-cent improvement in RevPAR at $113 for 2022.

In addition to the wider impacts of the border closures nationally, the Halifax/Dartmouth w area was part of the “Atlantic Bubble” for much of 2020 and 2021. This severely limited any sort of inbound visitation to those residing within neighbouring Atlantic provinces, and at times only allowing travel within the province.

With the re-opening of the borders and the rollback of the bubble in mid to late 2021, the Halifax/Dartmouth area saw an immediate return of leisure demand. The other segments of demand have been slower to return but given the strong and diverse economy in Halifax/Dartmouth, these segments continue to ramp up demand levels month over month. For 2022, occupied room demand in the market is expected to increase by 58 per cent. Although supply in the market is expected to grow by 2.1 per cent in 2022, the strength of the demand growth will push occupancy to 63 per cent — a 22-point increase over 2021.

After watching ADR fall to a low of $112 in 2020, the market is benefitting from the return of leisure travellers and periods of compression, which is driving a significant improvement in ADR. The ADR in the market returned to and exceeded 2019 levels beginning in April and it’s expected that this will continue to be the case over the balance of 2022, resulting in growth of 39 per cent, or $46, to $162. Overall, the Halifax/Dartmouth accommodation market is projected to see RevPAR improve by 115 per cent in 2022 as strong ADR improvement coupled with continued momentum in occupancy recovery drives the RevPAR gains.

St. John’s
As with Halifax, the St. John’s market was impacted by the “Atlantic-Bubble” policies in addition to the wider travel restrictions and border closures in both 2020 and 2021. The market has historically seen strong domestic demand in all market segments and good U.S. leisure visitation during the summer months. Most segments have been ramping up since the start of the year and heading into the summer months, leisure demand has been the driving force behind the demand growth. For 2022, demand growth in the market is expected to be 53 per cent. After a period of substantial supply growth between 2018 and 2020, there are no projected changes to the accommodation supply in St. John’s in 2022, which will help to increase occupancy by 19 points to 54 per cent for the year.

With demand over the summer months expected to be very strong, leading to compression, ADRs are going to be at or better than 2019 levels. As a result, ADR for the year is projected to grow by almost 31 per cent, or $32, over 2021 to $137. The strong improvement in occupancy and ADR is projected to drive to a RevPAR increase of approximately 100 per cent to $74 for 2022. Although this RevPAR level will be within several dollars of 2018 and 2019 levels, it’s significantly below prior peak RevPAR levels in 2014 and 2015 before the oil and gas industry downturn.

National Market Outlook
The projections for the national accommodation market are a roll up of the projections completed for the various major markets as well as the provinces and territories across Canada, considering the various economic, travel and supply-and-demand dynamics at play. While the national forecast provides a macro, directional indication of industry performance, there are numerous factors that will impact the recovery and performance of individual markets, such as sources/mix of guestroom demand and seasonality, which impact the performance results for 2022 and beyond.

National accommodation supply is projected to increase by 0.6 per cent, in 2022. This supply growth is largely comprised of new rooms supply, which is now opening after delays resulting from the pandemic. It should be noted this growth is net of any permanent closures of properties being converted to alternate use or for re-development. As noted, lingering impacts of the pandemic has affected the pace of construction on some new build projects due to labour shortage, supply-chain issues, rising construction costs and the current financing environment.

In every market across the country, guestroom demand has been — and is expected to continue — to grow significantly in 2022. While there has been a slow return of corporate, meeting/conference and government demand, the growth is being fuelled by leisure demand as travellers are eager to visit friends and family and take the trips they weren’t able to in 2020 and 2021. Nationally, demand is projected to increase by approximately 40 per cent for 2022, with occupancy improving 17 points to 59 per cent.

Undoubtedly, the biggest surprise in 2022 has been the dramatic improvement in ADR — which for the year is expected to grow by almost 22 per cent, or $30. At this pace, ADR nationally at the end of 2022 will be $165 — about $2 ahead of 2019 national ADR performance. Similar to occupancy, the improvement in ADR is largely being driven by leisure rates, which operators have pushed higher in light of labour challenges, inflationary pressures and compression periods.

As a result of the growth in both occupancy and ADR, RevPAR is projected to increase by 70 per cent to $97, up $40 from 2021.

By Nicole Nguyen, Senior Director, CBRE Hotels


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