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. Since the provincial economy is highly dependent on oil production, it was deeply affected by the downturn in oil sector from 2014 to 2016. Prices dropped from $99 a barrel in 2014 to $52 and 45$ in 2015 and 2016, respectively. As a consequence, production fell by 20.5% in 2015. Production started increasing again in late 2016, leading to positive growth in GPD. Even with this growth, unemployment in the province is projected to remain the highest in the country at around 14% over the next three years. The province has been negatively affected by not only the oil crisis but also the aging population and a slowdown in capital investment.

The economic downturn also affected the hotel industry. Lodging demand declined steadily between 2014 and 2018 with the exception of 2017 when a marginal 0.9% increase was realized. The biggest contraction—an 8.5% decrease—is expected for 2018. At the same time, the room supply is projected to increase by 7.3% this year with the opening of the Sandman St. John’s, the Alt Hotel St. John’s, and the Best Western Plus St. John’s Airport Hotel & Suites, which together brought 524 additional rooms to the market. The drop in demand and the increase in supply resulted in a significant decrease in RevPAR to a level lower than any year in the past decade. In the years that follow, supply growth is expected to be more aligned with demand growth, allowing for a slight improvement in RevPAR.

With the sharp drop in RevPAR in 2018, the per-room value for the province is expected to fall to $98,834, which represents an index of 1.00, showing no improvement since 2015. This puts the Newfoundland and Labrador market into eighteenth position for per-room value among all the major markets in Canada, moving it out of the top ten where it was in 2016.

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 $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 $92.45
2017 $91.78
2018 (f) $75.90
2019 (f) $77.70
2020 (f) $80.78
2021 (f) $84.08

For more information, please contact:

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