Canada -  Calgary

CALGARY is home to the majority of Canada's oil and gas production companies. With the collapse in oil price in late 2014, Alberta experienced two consecutive years of severe decline in every sector of the local economy. OPEC reached an agreement to cut oil production at the of 2016, which has boosted oil prices in 2017. This has in turn led to renewed investment and increased drilling, which are spurring growth in the primary and utilities sectors and manufacturing. At the same time, the construction sector is benefitting from rising activity in both the residential and non-residential markets. According to the Conference Board of Canada, the Calgary economy is set to expand by 4.6% in 2017.

In 2016, the per-room value for the Calgary market dropped considerably, undermined by the weak economic environment. A 20.4% decrease in the per-room value was projected for 2016 in the previous HVI report, but with the final year-end performance taken into account the per-room value actually fell 19.9% to $131,835. In 2016, the Calgary market experienced strong supply growth coupled with a contraction of demand, which caused the RevPAR to decline by 15% to $84.

In 2017, the economic outlook is much more positive, supported by the strengthening of oil prices and the recovery of the housing market. In this more supportive environment, the per-room value for the Calgary is expected to increase by 1.8% to $134,197. A moderate but healthy increase in occupancy is projected, as demand is projected to outpace the new supply in the market, including the 142-room Element Calgary Airport South and the 122-room Homewood Suites Calgary Downtown. In all, the market-wide RevPAR is projected to increase to $85, reflecting an increase of 1.0%.

With the local economy gradually moving towards recovery and the return of healthy real GDP growth, the outlook for the Calgary lodging market over the next three years is much more positive. The lodging market is expected to respond to the recovery of economy slowly while the recent growth in supply is absorbed. In all, the market is expected to seen improvement in both ADR and occupancy, and the per-room value is projected to increase to $151,293 in 2020. The Calgary market is projected to rank eighth in value among all the Canadian markets in 2020, down from sixth position in 2016.

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
2005 $81.54
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 $83.92
2017 $84.56
2018 (f) $87.50
2019 (f) $92.68
2020 (f) $97.50

For more information, please contact:

Jason Wight
jwight@hvs.com
  • +1 604 988-9743 (w)