Canada -  Calgary

Calgary is home to the majority of Canada's oil and gas production companies. Economic growth contracted in 2015 and continues to contract in 2016 while low oil prices undermine the economic performance of the city. Oil companies have reduced capital expenditures and downsized their operations, which is negatively affecting all sectors of the local economy. RBC is forecasting a 2.9% decline in GDP for Alberta in 2016 over and above the 3.5% contraction that the province suffered in 2015. The wildfires in Fort McMurray have contributed to this projected decline.

As a result of the weak economic environment, the per-room value for the Calgary market dropped considerably in 2015. We projected a 12.5% decrease in the per-key value for 2015 in the last HVI report, but with the final year-end performance taken into account, the per-key value actually saw a more severe drop of 16.9%. Even with this decline, the per-key value is nonetheless higher than the values that this market achieved between 2009 and 2011. The per-room value for Calgary is projected to decrease another 20.4% in 2016 to $130,986. The Calgary market continues to experience a double whammy in terms of high supply growth coupled with contracting demand, which is causing the RevPAR to freefall—it is expected to decrease 18.5% to $81.64 in 2016.

The outlook for the Calgary lodging market is more positive for 2017. Both ADR and occupancy are projected to climb with the expectation that oil prices will begin to recover. Moreover, fiscal stimulus and the rebuilding work after the wildfires are expected to have a positive impact on the Alberta economy. With the local economy expected to move towards recovery, the per-room value is projected to increase to $150,542 in 2019, which is nonetheless a loss in value relative to 2015. The Calgary market is projected to rank sixth among all the Canadian markets in value in 2019, down from third position in 2015.

Change In Value For Market: ($CAD)

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%

Calgary RevPAR Change ($CAD)

Calgary RevPAR ($CAD)

Year RevPAR
2006 $95.81
2007 $105.65
2008 $110.43
2009 $96.34
2010 $93.30
2011 $98.94
2012 $110.33
2013 $117.94
2014 $114.28
2015 $100.12
2016 $81.64
2017 (f) $82.39
2018 (f) $89.31
2019 (f) $91.77

For more information, please contact:

Carrie Russell, AACI, MAI, RIBC, ISHC
CRussell@hvs.com
  • +1 604 988-9743 (w)