Canada -  Newfoundland and Labrador

NEWFOUNDLAND AND LABRADOR produces one-third of Canada’s conventional light crude thanks to four offshore production facilities: Hibernia, Terra Nova, White Rose, and Hebron. Currently, the province is facing budgetary challenges; the drop in oil prices has led to deficits and rising public debt. Business investment forecasts looks good as many companies are moving forward with their projects. Even with the construction finishing at the Muskrat Falls hydroelectric project, real business investment looks bright. New investment is taking place in the mining industry, an underground expansion of the Voisey’s Bay mine in Labrador. Increasing production at the Hebron offshore oil field will help the provincial economy grow this year. Because of the increase in oil production, GDP growth is projected at 4.4% in 2019 and 1.0% in 2020.

Lodging demand in the province generally declined between 2014 and 2018; the exception was a marginal 0.9% increase in 2017. A 3.6% increase in demand is projected for 2019. At the same time, the room supply is projected to increase by 1.8% with the opening of the Hilton Garden Inn St. John’s later this year. The only other new supply facing the market is the 90-room Holiday Inn Express Corner Brook which is expected to open in early 2021 and the Hampton Inn Deer lake in 2020.

In 2018, the drop in demand and the increase in supply resulted in a massive drop in RevPAR to a level lower than any year in the past decade. In the years that follow, supply is expected to grow at roughly half the pace of demand, allowing for an improvement in RevPAR.

With the sharp drop in RevPAR in 2018, the per-room value for the province fell to $97,800, a decline of 20.7%. In 2019, the per-room value is projected to drop further to $94,700, representing a decrease of 3.1%. This puts the Newfoundland and Labrador market into eighteenth position for per-room value among all the major markets in Canada for the second year in a row.

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%

Newfoundland and Labrador RevPAR Change ($CAD)

Newfoundland and Labrador RevPAR ($CAD)

Year RevPAR
2006 $72.96
2007 $78.02
2008 $83.30
2009 $84.25
2010 $91.50
2011 $97.08
2012 $102.03
2013 $107.55
2014 $104.27
2015 $97.55
2016 $92.45
2017 $91.78
2018 $75.86
2019 $72.23
2020 (f) $75.52
2021 (f) $78.92
2022 (f) $82.43

For more information, please contact:

Monique Rosszell, AACI, MRICS, ISHC
[email protected]
  • +1 416 686-2260 (w)
  • +1 514 776-7099 (m)
  • +1 416 704-3883 (m)