BANFF – Average hotel room rates in Banff are continuing to rise to an average nightly rate of $414 in 2024 compared to $231 in 2020 and 2021 in the COVID-19 pandemic years.
On Monday (Feb. 24), Town of Banff administration presented to the governance and finance committee statistics showing the impact the pandemic had on the accommodation sector as well as some financial indicators of recovery happening over the past three years.
Town of Banff officials say the report – which looks at occupancy, rooms reporting, average daily rate, and total annual room revenue from 2017-24 – only represents data available to the municipality and is not intended to be a fulsome view of the state of Banff’s local economy.
“One of the key indicators of the financial health of our community is the health of our accommodation sector,” said Lauren Aebig, director of corporate services for the Town of Banff.
“These statistics focus only on room occupancy and don’t include trends in related products such as food and beverage or other tourism services.”
Aebig said average daily rates typically trend lower in the shoulder season of October through April and peak in the summer months of July and August when demand is highest.
She said the average daily rate for 2017 through 2019 was $269 per night, which dropped to an average of $231 per night in 2020 and 2021. Average room rates have since continued to rise to $340 per night in 2022, $380 per night in 2023, and $414 per night last year.
“Similar to the trend with occupancy, there was a sharp drop off in average daily rates in April and May of 2020 and partial recovery in 2021,” she said.
To look at occupancy, the average percentage of available rooms occupied during each month was measured.
According to the statistics, hotel occupancy is still below the pre-pandemic years of 2017-19, when more than 90 per cent of rooms were filled.
“Occupancy varies throughout the month with highest occupancy on weekends, and throughout the year with highest occupancy in the months of June through September,” said Aebig.
Coun. Barb Pelham said it is interesting to note the hotel occupancy rate appears to be on a decreasing trend over the past seven years, especially during the peak season, yet the average daily rates are increasing.
“It’s a really interesting transition within the sector,” she said. “I think part of it probably relates to staffing challenges, but it’s something of note as occupancy rates decrease, the ADR (average daily rate) increases.”
As for total annual room revenue, the report showed $338 million in 2017, $429 million in 2018, $411 million in 2019 before plummeting to $151 million in 2020 and $208 million in 2021.
By 2022, annual room revenue kept growing to $453 million in 2022, $530 million in 2023 and $588 million in 2024.
“As expected, a significant decrease was experienced in 2020 and 2021, but revenue has since rebounded,” said Aebig.
Also measured was the total annual number of rooms available for occupancy, comparing total room nights sold to total room nights available.
Aebig said that pre-pandemic, the average number of rooms available was 5,659, or 2.07 million room nights per year.
“This number dropped in 2020 to 4,947 rooms (1.81 million room nights),” she said.
Mayor Corrie DiManno questioned whether the Jasper wildfire last July had an impact on hotel occupancy in Banff.
“I personally did a lot of media around are people now being re-routed to Banff or has the smoke in the area affected our occupancy etc,” she said.
“When you look at July and August, it looks like there’s a bit of an upward trajectory there, so I am curious if we have a more definitive answer from industry if, indeed, there was a substantial impact.”
Town Manager Kelly Gibson said it was discussed at the time, noting the smoke may have driven last-minute travellers away from Banff and those who already had plans for Jasper may have chosen to visit Banff.
“The additions and deletions probably offset each other for the most part so there wasn’t a significant change,” he said.
Moving forward, administration plans to provide updates on these hotel metric statistics to council on a quarterly basis.
