Canada -  Calgary

For a comprehensive review of the Canada market, click below:
HVS In-Depth Canada Hotel Valuation Index:   2019 | 2018 | 2016 | 2015 | 2014 | 2013

CALGARY is situated in the eastern foothills of the Canadian Rocky Mountains but is known for being home to the Canadian headquarters of many energy companies. The local economy is highly dependent on the performance of the energy sector, which continues to face challenges, so much so that the downturn in the energy sector negatively affects other industries within the local economy, particularly the construction sector, which has seen a drop in total output since 2015. Given the slowness of the recovery in Alberta, Calgary is projected to see GDP decline of 0.4% in 2019.

The Alberta oil sector has faced challenges since the price of oil plummeted in 2014. OPEC cut production in 2016 to help strengthen prices, which helped the economy recover in 2017. By mid-2018, however, pipeline constraints produced a supply glut that caused producers to sharply reduce prices for Alberta oil. The unsustainably low prices forced the Province to mandate production cuts in January 2019. The price for Alberta oil quickly recovered, and the province is now in the process of easing up on production cuts.

In 2016, the Calgary market experienced a sharp drop in value per room ,from $164,600 in 2015 to $129,000 in 2016, resulting in a rank of sixth in the country. The city that had the highest room value in the country in 2014, fell to fourteenth position by 2018. After the steep decline in 2016, the room value in Calgary gradually increased in 2017 and 2018. However, the recovery is expected to be short lived because the economy is experiencing more turbulence in 2019 due to the lack of pipeline capacity to transport energy products and the low level of capital investment by the energy sector—a 4.3% decline in value is projected for that year.

The main reason for the projected decline in value is that the growth in demand for hotel rooms is lower than the expected increase in the supply of available rooms. Five new hotels opened in Calgary this year: the Hyatt Place Calgary Airport, the Westin Calgary Airport, the 390-room Residency Inn in Downtown Calgary, the Holiday Inn Hotel & Suites Calgary South, and the Best Western Executive Residency. This new supply has added further stress to the market. Demand is projected to increase by 3.5% in 2019, which is well below the projected 7.6% increase in supply. Consequently, the Calgary market is expected to register negative RevPAR growth in 2019.

Two new hotels are expected to open in 2020, increasing the total room supply in Calgary up a further 350 rooms. The market-wide occupancy is projected to decline to below 60% in 2019 and then gradually increase, reaching 61% by 2022. In the longer term, the market is expected to see improvement in both ADR and RevPAR, and the per-room value is projected to increase to $137,700 in 2022. Despite the improvement, Calgary is projected to maintain it’s fourteenth rank position.

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%

Calgary RevPAR Change ($CAD)

Calgary RevPAR ($CAD)

Year RevPAR
2006 $95.81
2007 $105.65
2008 $113.99
2009 $100.05
2010 $96.85
2011 $102.05
2012 $113.63
2013 $121.25
2014 $115.01
2015 $101.49
2016 $85.80
2017 $86.12
2018 $90.63
2019 $86.83
2020 (f) $89.01
2021 (f) $92.15
2022 (f) $94.46

For more information, please contact:

Jason Wight, AACI
[email protected]
  • +1 604 988-9743 (w)