Upbeat, downbeat, and everything in between; statistics often tell the story. But projections may vary as much as daily weather forecasts, which can fluctuate so significantly they leave you wondering whether you should plan for a day in the sun, or expect a torrential downpour.
Statistics for the domestic travel market show that solid growth is expected throughout the remainder of the year. However, in the current issue of its newsletter, the Canadian Tourism Commission states that while demand for air travel remains robust, Canadian hotel rates have been flattening out.
More significantly, American travel to Canada is decreasing at a rate that should have the hotel industry concerned. Fuelled by a decline in automobile trips to Canada, arrivals from the U.S. fell by 11.8 per cent in April 2007 over the same period last year. Causing further consternation, there was a decline of 5.1 per cent year-to-date for total international visits, while travel from the U.S. dropped 8.1 per cent.
Nevertheless, there is some good news. According to PKF Consulting, by year-end 2006, occupancy at a national level improved by 1.3 points to 65 per cent, and average rates were up four per cent to $124. In 2006, top line revenue across the country grew by 5.8 per cent over 2005, translating into a bottom line profitability increase of 15 per cent.
Not surprisingly, the most significant growth rates in recent years have occurred in Western Canada, with total revenues per room up $4,112 in 2006, or 8.1 per cent more than in 2005. In fact, PKF reports that total revenues per room in Western Canada have grown an incredible 17.8 per cent since 2002. In Central Canada, total room revenue in 2006 grew by $1,699 per room or 3.4 per cent over 2005 levels, and surpassed 2002 revenues by $2,491 per room. And in Atlantic Canada, by year-end 2006 the region posted a total revenue growth of $1,770 per room or 4.8 per cent above 2005 levels.
While net earnings reached a solid $10,751 per room in 2006, the year 2000 remains the high-water mark for the Canadian accommodation industry, at $11,056 per room in profitability. PKF forecasts industry profitability will finally surpass 2000 performance levels in 2007 — increasing to $11,400 per room.
Those statistics are bound to put smiles on the face of hoteliers and industry analysts alike. Nonetheless, seven years is a long time to get back to where you once were. If the industry wants to ensure it keeps growing and becoming more profitable, let’s not forget this key point: Never before has there been as much interest in travel, as much choice in travel destinations, and as many booking vehicles as there are today. As a nation if we can’t capitalize on that, we’re doing something terribly wrong. The sooner we assess the real problem, the better off we will all be.