Canada -  Ottawa-Gatineau

Overview:

The Ottawa-Gatineau lodging market is highly driven by government demand given that Ottawa is Canada’s capital city. From 2012 to 2015, the market experienced slow economic growth, mainly because of the previous government’s cuts to the public service. According to the Conference Board of Canada, the new federal government is expected to give a modest economic boost to the market area. The economic outlook for 2016 is positive with increased levels of activity in the public, construction, and service sectors resulting in a 1.6% projected increase in GDP.

In 2015, the Ottawa-Gatineau lodging market realized a record-breaking RevPAR of $109.83, up 8.8% over the previous year. This growth was driven primarily by a 3.2% decrease in the room supply from the closure of the Holiday Inn and the Minto Suites in 2014, which helped increase in the market-wide occupancy in 2015. Given the stronger performance, the market achieved a per-room value of $126,323 in 2015, up 8.0% over the previous year, which is above the projection we made in the 2015 HVI report of 4.9% growth.

In 2016, the market-wide RevPAR is projected to grow 2.9% with a 4.5% increase in room demand. The anticipated RevPAR growth takes into account a projected 4.7% increase in the room supply with the opening of four new hotels, including the newly opened Andaz Ottawa and Alt Hotel Ottawa.

The numerous major projects taking place in the area, such as the $5.1-billion light-rail transit project and the $3-billion Parliament Buildings renovation project, will support demand growth going forward. The local hospitality and tourism industry will also benefit from the thousands of Canadians that are expected to visit the capital to celebrate the country's 150th birthday in 2017. Overall, the nation’s capital has a very positive economic outlook.

From 2016 through 2019, the market is projected to experience an 11.0% increase in supply. Nevertheless, hotel operating performance and demand are also expected to strengthen during this period, resulting in growth in the per-room hotel value of the market. The per-room value is projected to reach $152,931 in 2019, pushing the Ottawa-Gatineau market into fourth position among 19 major Canadian lodging markets, up from eighth in 2015.

Valuation Trends and Predictions:

Ottawa-Gatineau Canada
Previous Year +5% (14 of 19) +9% (12 of 19)
Growth in 2017 +11% (1 of 19) +5% (12 of 19)
Growth in next 3 years +15% (3 of 19) +8% (15 of 19)

Change In Value For Market:

Ottawa-Gatineau RevPAR % Change

For more information, please contact:

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