Vancouver hotel occupancy fell in June but prices continued to rise, keeping the metropolitan region as the priciest in Canada to buy a hotel room night for the .
Visitors to Metro Vancouver paid an average $336.53 for a hotel-room night in June, up more than 5.5 per cent from $318.92 in June 2023, according to new data from CoStar, a global provider of real estate data, analytics and news.
This is the third-highest average nightly hotel-room rate that the region has ever seen and it is only $0.25 away from tying the $336.78 rate in September, which was the second-highest hotel-room rate average that the region has seen. The highest-ever average nightly hotel-room rate seen in Metro Vancouver was last July, when it was $347.15 – a record high for any Canadian metropolis in any month.
High prices for hotel rooms could deter potential visitors.
Like last year, Montreal was the second-priciest Canadian city to buy a hotel room night in June, beating Toronto, which came in third place in both of those months.
Visitors to Montreal in June paid an average $304.14 for each hotel-room night, up less than half of one per cent from the $302.71 that they paid for room nights in June 2023. Those who chose to stay in Hogtown in June paid $286.44 for each room night, down less than 0.7 per cent from the $288.44 per hotel-room night that they paid in the same month one year ago.
The city with the biggest jump in hotel-room rates in June was Edmonton, potentially because of dynamic pricing and interest in the National Hockey League's Edmonton Oilers, which played four home games in two playoff series in the month. The Oilers then lost the seventh game of the Stanley Cup Finals to the Florida Panthers in a showdown in the Sunshine State.
Edmonton visitors still achieved a relative bargain, however, with room rates throughout the month going for an average $150.68, which was the least among major Canadian metropolitan areas. It was, however, 10.2 per cent more than the $136.76 average price that visitors to Edmonton paid for hotel-room nights in June 2023.
When downtown areas are segmented out and compared, Vancouver's topped Toronto's as the priciest in Canada for a hotel-room night in June: $407.46 to $388.29. For Vancouver, that was up 4.7 per cent, compared with June 2023, whereas downtown Toronto hotel-room rates dipped 0.6 per cent from $390.82 the previous June.
Some good news for the Vancouver tourism sector was that there were more hotel rooms available in June, compared with June 2023. That was also true during the first half of 2024 versus the same months in 2023, CoStar's national director of hospitality analytics, Laura Baxter, told BIV.
"Over the first six months of this year, we saw an increase in supply the Metro Vancouver market by 1.5 per cent and we saw demand go down by 1.4 per cent [in terms of total nights purchased,] so on balance, that equated to just less than a three-per-cent occupancy decline," she said.
In the month of June, however, occupancy at Metro Vancouver hotel rooms declined by much more: 5.4 percentage points to 83.6 per cent, from 89 per cent in June 2023.
The sub-region within Metro Vancouver that provided the biggest hit to regional hotel occupancy was an area that CoStar calls Vancouver Airport. That region, around the Vancouver International Airport, includes the Fairmont Vancouver Airport hotel as well as many other hotels in Richmond.
The 388-room Radisson Blu Vancouver Airport hotel is in that group of hotels and it was closed for renovations in June 2023. The Radisson Blu reopened in July last year and remains open, meaning that the sub-region has substantially more hotel rooms this year than last year. Unite Here Local 40 workers are also on strike outside the Radisson Blu, which likely dissuades some potential guests from booking rooms at the large facility. As such the Vancouver Airport hotel region saw a 12.4-per-cent drop in occupancy in June, compared with June 2023, according to CoStar.
Hotel occupancy in the Fraser Valley followed a similar trend to that in the Vancouver Airport hotel submarket, by being down 12.4 percentage points year-over-year in June. The 68-room Holiday Inn Express & Suites Chilliwack East is open this year, whereas it was not open last year, Baxter said.
Baxter suggested that one reason why visitors bought fewer total Metro Vancouver hotel-room nights in June, compared with June 2023, was because the trend of huge post-pandemic pent-up demand for travel has played itself out.
"That's trickling off now," she said about the phenomenon some have called "revenge travel."
"I think the reverse is true now," Baxter said. "So many people spent so much money on travel over the past couple of years that I think as people are tightening their belts, they're having to prioritize differently and are spending less on travel."
