Are we nearing the end of the cycle? Will bust follow boom? What does 2009 have in store for Canada’s hotel industry? These are a few of the questions hoteliers are asking themselves amidst the daily barrage of doom and gloom. But as rising fuel costs, a high Canadian dollar and the fear of a recession continue to cause stress and frustration for North Americans it’s business as usual for many Canadian hoteliers.

Although recent developments — such as the closing of the GM plant in Oshawa, Ont., and Air Canada’s announcement that it will be laying off 2,000 workers due to rising fuel costs — are worrisome, overall the hotel industry is humming along. One need only look to our western provinces to see just how buoyant it is.   

As the bellwether of the dynamic lodging industry, Hotelier’s Top 40 report underscores that positive trend, indicating Canada’s hotel business is on solid ground. In 2007, the Top 40 hotel companies posted combined sales of $14.5 billion from a total of 1,808 properties, representing a growth of 12.4 per cent over the $12.9 billion generated the previous year. According to PKF Consulting in Toronto, the national occupancy rate in ’07 rose by 0.6 percentage points to 65.1 per cent. ADR reached $127.06, a 3.7 per cent increase over $122.57 in 2006, while RevPAR increased 4.6 per cent from $79.07 in ’06 to $82.74 in ’07.

In terms of planned growth, many Top 40 companies are looking to build new properties in the coming year. According to a recent report from Lodging Econometrics, the bulk of proposed development in Canada will take place in the central and western regions. Ontario leads the central provinces with 94 projects in the pipeline, while out west, Alberta has 61 and B.C. 44.    

Ironically, though Americans took fewer trips to Canada and there was an overall reduction in spending, Canadians spent 6.7 per cent more on tourism in Canada. Perhaps the industry should take solace in the findings of a survey recently conducted by Zoomerang for Carlson Hotels in the U.S., which shows that despite higher travel costs this summer, a majority of families still intend to take an annual family holiday.

In fact, 41 per cent of those surveyed said they plan on taking a vacation with their family this summer. Another 28 per cent are still undecided, but are considering it. The remaining participants reported they’re staying home, citing budgetary concerns. Of those families planning a summer escape, 54 per cent will be travelling more than 500 miles and nearly 70 per cent said they’ll do so by car.

But regardless what happens throughout the summer months, one thing is certain. Come September, it will be an entirely different story.


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