Canada -  Edmonton

EDMONTON’s economy, although well diversified, has been negatively affected by the drop in oil prices, which translated into a decline in an array of sectors for the city in 2016. According to the Conference Board of Canada, the city’s real GDP declined by 3.4% in 2016. As oil prices have begun to climb, Edmonton is projected to see a resumption of growth in 2017, when the GDP is projected to increase by 3.9%. Higher oil prices have led to renewed economic growth in Edmonton this year, as oil companies have increased investment and drilling activity.

In 2016, the RevPAR for Edmonton fell to $74, down 11% from $83 in the previous year. A drop in both ADR and demand, combined with the addition of new supply to the market, resulted in this loss in RevPAR. Although the same pattern is projected to recur in 2017, the decline is projected to moderated by an improvement in ADR. The hotels in the pipeline include JW Marriott Edmonton, the Element Edmonton West, the Four Points Edmonton West, and the TownePlace Suites Edmonton Sherwood Park. With this new supply, the RevPAR is projected to drop another 5% to $70 even with a 1% increase in ADR.

With the downturn in the local economy, the per-room value for the Edmonton market fell by 18.1% in 2016, which is in line with what we projected in the 2016 HVI report.

In 2017, the Edmonton lodging market is projected to see a 6% increase in supply at the same time that demand is projected to decline.  In light of this, the per-room value is projected to fall another 2.8% that year to $106,742.

Growth in the per-room value is projected to resume in 2018, but the pace of growth is expected to remain slow with a large amount of new supply still entering the market—the room supply is expected to increase by 8% between 2017 and 2020. The new rooms will make it difficult for this market to realize the performance levels it had seen before the downturn in the oil and gas industry. Consequently, the Edmonton market is projected to remain in sixteenth position in 2020, the same as in 2016; the per-room value is projected to reach $116,406, well below the levels recorded prior to the downturn in the market.

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%

Edmonton RevPAR Change ($CAD)

Edmonton RevPAR ($CAD)

Year RevPAR
2005 $68.23
2006 $79.20
2007 $88.85
2008 $92.93
2009 $79.89
2010 $76.60
2011 $77.32
2012 $83.20
2013 $90.52
2014 $93.33
2015 $83.22
2016 $73.60
2017 $69.56
2018 (f) $71.51
2019 (f) $73.20
2020 (f) $75.02

For more information, please contact:

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