Room rate growth continues drive Canada hotel performance 

CoStar data for January shows that the hotel industry in Canada had a positive year-over-year performance, mainly due to growth in room prices. CoStar is the leading provider of real estate marketplaces and information in the property market.

January 2025:

• Occupancy: 49.8% (+0.3%)
• Average daily rate (ADR), CAD180.04 (+2.7%)
• Revenue per available room (RevPAR): CAD89.60 (+3.1%)

Laura Baxter’s, CoStar Group Canada’s director of hospitality analysis, said: “Room rates increased RevPAR in January, which is consistent with the current trend.”

Group demand showed a significant lift among segments. This benefited ADR, which grew faster than the national median. This trend is expected continue through 2025, as the cadence and frequency of conventions, meetings and conferences continues to normalize toward typical demand patterns.

British Columbia had the highest occupancy rate (52,9%) among the provinces and the territories, which is 1.3% higher than 2024. Vancouver had the highest occupancy (60,7%) among the major markets. This was down 1.1% from January 2024. Prince Edward Island reported the lowest occupancy of all provinces (28.5%), down 0.3% from 2024. Calgary reported the lowest occupancy at the market level (-6.5% – 45.3%).

Baxter said that the most recent forecast from CoStar and Tourism Economics for 2025 predicts a RevPAR increase of 2%. This is offset by a 1.8% rise in ADR to counter a mostly flat level of occupancy.

“If any proposed tariffs were to become reality, this could lead to a contraction in the economy and this remains a downside to our forecast.”

Around 10,000 rooms are under construction in the country. Of these, 60% are expected to open by 2025. This new supply will compensate for the limited additions in the past few years, when construction delays and conversions of hotels to other types of housing put downwards pressure on the measure.