Canada -  Edmonton

For a comprehensive review of the Canada market, click below:
HVS In-Depth Canada Hotel Valuation Index:   2019 | 2018 | 2017 | 2016 | 2015 | 2014 | 2013

EDMONTON, the capital of the most energy-resource-rich province in Canada. The city is diversified across the government, manufacturing, retail, and services sectors.  Nonetheless, the city’s growth and contraction are closely tied to the fortunes of the oil and gas sector.  As a result, the city escaped relatively unscathed from the 2010 recession as oil and energy infrastructure projects expanded significantly in the subsequent years and buoyed local employment in manufacturing, retail sales, and grew government revenues significantly which helped sustain strong growth in the public sector.

The oil and gas sector has been facing significant headwinds since late 2014.  Since then commodity prices have been volatile, and pipeline constraints have limited the market for oil and gas products.  The impacts have been widespread across the province and unveiled a structural issue with provincial funding and led to austerity measures to reduce the size of the public sector.  Between 2015 and 2019 the market saw both supply side and demand side movement in the wrong directions that saw hotel values decline significantly.

The current pandemic has significantly increased the volatility with oil prices cratering in response to significantly lower demand prospects owing to spreading global shutdowns and coupled with geopolitical tensions between oil producing nations that began with a price war between Russia and Saudi Arabia. As a result, the prospects for the energy sector are grim even on the other side of the immediate impacts of the pandemic which have been rapid, widespread, and deep.

Edmonton’s hotel supply had increased significantly in recent years, and although several projects are still proposed, it is likely some will be cancelled and others that proceed will face delays.  This will alleviate some pressures on operators within the market. Nonetheless, the market will see a further correction in values in 2020 as performance metrics across the market collapse and the prospects for recovery being less favourable than other markets due to the volatility and uncertain in the energy sector which plays a key role in the Edmonton economy.

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: More than -10%