Visitors at the lighthouse in Peggy’s Cove, N.S., in 2023. Occupancy rates were up at Canadian hotels and short-term rentals in June compared with the same month a year earlier.Darren Calabrese/The Canadian Press
Canada-first vacations are having their intended effect, early summer data suggest.
Occupancy rates were up at hotels and short-term rentals in Canada in June compared to the same month last year. In the U.S., by contrast, both segments saw a larger share of empty units, according to market data viewed by The Globe and Mail.
“A driver of Canadian leisure tourism seems to be the idea to stay closer to home this summer,” said Jan Freitag, national director of hospitality analytics at CoStar Group.
And patriotic spending means Canada’s hospitality industry hasn’t faced the same level of economic uncertainty as much as the U.S. tourism sector, the numbers suggest.
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The average revenue per available room for Canadian hotels, a key performance indicator for the sector, was up 4.4 per cent in June compared to a year earlier, according to CoStar.
That’s what Mr. Freitag calls “a pretty healthy increase” and one that he says is driven by both occupancy and higher room rates.
Hotels across the country were more than three-fourths full, on average, in June. The average occupancy rate reached 75.6 per cent, even higher than an already robust 74.5-per-cent rate in June of 2024, Mr. Freitag noted.
The average room rate, meanwhile, was $239 last month, nearly 3 per cent more than what it was a year ago.
The June bump helped to push revenue growth per room to 2.8 per cent for the first six months of the year, comfortably ahead of the rate of inflation for the same period, the data show.
Contrast that with the U.S., where both occupancy and revenue per room were down last month compared to a year ago and where revenue growth per room has been virtually flat for the first half of the year.
Shaky consumer confidence is keeping more Americans from booking hotel stays, while uncertainty about tariffs is leading more businesses to trim back travel expenses from their budgets, Mr. Freitag said.
Financial worries may have also made some U.S. domestic travellers more cost-conscious, driving demand for larger short-term rentals, which allow groups to split the cost of overnight accommodation.
The nightly costs for short-term rentals were up nearly 7 per cent in the U.S. in June compared to a year earlier, while they remained virtually flat in Canada, according to data from AirDNA, which scrapes the web to collect data from sites including Airbnb, Expedia and Booking.com.
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But much of the increase in U.S. rates reflects Americans’ growing preference for those bigger rentals, said Bram Gallagher, director of economics and forecasting at AirDNA.
Meanwhile, there’s little question that the Buy Canadian sentiment is buoying the short-term rental sector north of the border. Domestic demand for vacation rentals was up more than 12 per cent in June compared to a year earlier, according to the numbers crunched by Mr. Gallagher.
More domestic demand likely helped make up for a dip in the share of bookings from Americans, which decreased from 24 per cent in June, 2024, to 21 per cent this year. Meanwhile, international demand remained roughly steady, according to the data.
The economic outlook is hardly an explanation for why Canada’s hospitality industry got off to a roaring summer and the U.S.’s didn’t. After all, Canada’s own collective mood is far from cheerful, with surveys showing that both consumers and businesses remain worried about the impact of tariffs.
But while financial concerns prompted Canadians to pull back on spending in certain sectors – such as housing, where the trade war cast a frigid spell over the spring housing market – they don’t seem to be holding people back from shelling out on domestic travel.
A recent report by Toronto-Dominion Bank estimated tourism spending in Canada, which amounted to $100-billion last year (in 2017 dollars), will grow by between 2 and 4 per cent this year, propelled in large part by domestic trips.
The U.S., meanwhile, is projected to lose US$12.5-billion in international visitor spending, roughly a 7-per-cent drop compared to last year.
