Canada -  Newfoundland and Labrador

The fortunes of the Newfoundland and Labrador hotel market rest largely upon the state of the province’s offshore oil and gas industry, although the marine biotechnology and mining sectors also play a role. According to RBC, the province’s real GDP decreased by 2.2% in 2015, mainly because of a decline in oil production.

Despite the low Loonie and increased production at Vale’s hydromet nickel-processing plant, the manufacturing sector is projected to decline 12% in 2016 because of a major fire at a fish-processing plant and weak prospects for fabricated metals. In addition, a weaker performance for the construction sector is anticipated for next two years because of a decline in the residential housing sector. With these factors in mind, RBC projects the province’s GDP to decline a further 0.2% in 2016 and another 1.5% in 2017.

In 2015, market-wide declines in both occupancy and ADR resulted in a lower RevPAR of $97.51, down 6.4% from the 2014 level. The number of accommodated room nights was down 4.0% that year. In the 2015 HVI report, the per-room value for the Newfoundland & Labrador lodging market was projected to decrease by 2.0%. Given the weaker-than-anticipated economic situation, the per-room value, at $133,841, was actually down by 5.4% from the year prior.

In 2016, the Newfoundland & Labrador lodging market is projected to again see negative growth because of the ongoing recession. Moreover, the room supply will be up by 1.8% with the opening of 110-room Holiday Inn Express St. John’s Airport. In all, the RevPAR is projected to decline by 3.9% to $93.67. In this context, the per-room value is projected at $126,138, down 5.8% from the 2015 level.

From 2015 to 2019, the room supply is projected to increase with the addition of 900 new rooms. The market’s per-room hotel value is projected to see modest growth in 2017 followed by stronger growth of 6.9% in 2018, as oil demand is projected to return. The province’s per-room value is projected to reach $137,967 in 2019, which is roughly on par with the 2012 value. This puts the province in tenth place among the 19 Canadian lodging markets that year.

Change In Value For Market:

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Newfoundland and Labrador RevPAR Change

Newfoundland and Labrador RevPAR

Year RevPAR
2006 73.00
2007 77.99
2008 83.31
2009 84.23
2010 91.54
2011 97.09
2012 102.03
2013 107.55
2014 104.21
2015 97.51
2016 93.67
2017 (f) 92.46
2018 (f) 95.51
2019 (f) 98.00

For more information, please contact:

Monique Rosszell, AACI, MRICS, ISHC
mrosszell@hvs.com
  • +1 416 686-2260 (w)