Canada -  Newfoundland and Labrador

The fortunes of the NEWFOUNDLAND & 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 increased an estimated 1.9% in 2016, mainly because of a surge in oil production. Offshore oil production was up nearly 23% in 2016 relative 2015. Even though the upward trend in oil production is expected to continue, driven by the Hebron field coming on line in late 2017, the real GDP is projected to decline by 1.0% for 2017, mainly because of a soft labour and housing markets.

In 2016, market-wide declines in both demand and ADR resulted in a lower RevPAR of $93, down 5% from the 2015 level. In the 2016 HVI report, the per-room value for the Newfoundland & Labrador lodging market was projected to decrease by 5.8%. The per-room value, at $124,502, was actually down by 7.0% from the year prior, largely because of softer-than-anticipated demand and an increase in new supply, coupled with a weaker ADR.

Based on the year-to-date performance, the market is projected to see positive growth in lodging demand in 2017, mainly because of the growth in oil production and the 2017 Tim Hortons Brier that was held in St. John’s in March. With this improvement in demand, the Newfoundland & Labrador lodging market is projected to see positive RevPAR growth for the first time in three years. The room supply will increase in 2017 and 2018 with the opening of 175-room Best Western Plus St. John's Airport Hotel & Suites, the 148-room Alt Hotel St John, and Sandman St John's. Despite the new supply, the RevPAR is projected to increase to $93 in 2017, reflecting a gain of 0.6% over the previous year, and the following year it is projected to reach $94.

In this context, the per-room value is projected at $126,164 in 2017, up 1.3% from the 2016 level. The market’s per-room hotel value is projected to see a comparable gain in 2018, as oil-related demand is projected to return and the new supply gradually becomes absorbed. The province’s per-room value is projected to reach $136,942 in 2020, which puts the province in thirteenth place among the 19 Canadian lodging markets that year, down from tenth place in 2016.

Change In Value For Market: ($CAD)

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 ($CAD)

Newfoundland and Labrador RevPAR ($CAD)

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 $92.52
2017 $93.05
2018 (f) $94.27
2019 (f) $97.08
2020 (f) $101.00

For more information, please contact:

Monique Rosszell, AACI, MRICS, ISHC
[email protected]
  • +1 416 686-2260 (w)