Occupancy Rate Trends Mean Opportunities in the North

Access to accommodations for travellers in the rural north could become more difficult to find due to a growing tourism industry and rising occupancy rates across the region.

According to an article published by Destination Northern Ontario, rural occupancy rates and revenue generated for Northern Ontario accommodations have jumped 15 and 28 percent points year over year respectively in 2017.

This following a record-breaking year for tourism in Canada and visitors from overseas hitting an all-time high.

For those following the tourism trend in Ontario’s north, increased appetite for overnight stays in the region could mean big business opportunities for current hotel and resort operators and those who want to cash in on the demand for a comfortable night’s rest.

Occupancy rate is a performance measurement that reflects the space in a hotel, resort, or rental property that is actually being used. It refers to the number of occupied units at a given time compared to the total amount of space available. For example, if a 100-room hotel has 70 rooms booked, the occupancy rate would be 70%.

While increased occupancy can present challenges for travellers looking to secure accommodations for unplanned stays or late season rentals, this is good news for both hotel and resort operators and a healthy sign of growth for the north’s tourism industry as a whole.

Fewer rooms mean more opportunity for growth in the accommodation sector

With the strengthening operating performance of hotels, resorts and lodges in the north, occupancy rates have been growing steadily, supporting the further development for future supply in the accommodation sector.

“Demand [for accommodations] in Region 13 (Northern Ontario) has increased by 31% over the last five years, at a compound rate of almost 7%,” says Rebecca Godfrey, Director and assistant practice lead with CBRE’s Tourism & Leisure group in Canada. “With supply growth in the range of 1.7%, this reflects strong investment and strong performance in the accommodation sector over the 2012-2017 period.”

“Occupancy levels in Northern Ontario as a whole have traditionally remained in the high 50% range, but with demand up 4% and occupancy at just under 63%, we (CBRE) are expecting a two or three-point increase for Region 13 by year-end.”

As demand continues to outpace the supply of fixed-roof accommodations, there is an opportunity for existing and new businesses to invest in the north to fill this widening gap in Northern Ontario’s tourism sector.

Addressing growing occupancy rates and meeting accommodation demands

The performance of hotels and resorts to meet increasing demand continues to be nurtured by ongoing training opportunities and capital investment strategies for business operations through Destination Northern Ontario, a pan-northern organization that champions tourism sector growth in Northern Ontario.

Tourism Excellence North (TEN) is a great first step in identifying what operators need in order to advance and improve their products,” says David Maclachlan, Executive Director, Destination Northern Ontario.

TEN is a tourism development program for Northern Ontario that provides training solutions and investment strategies to strengthen the ability of tourism operators to adapt to changing markets that impact facets of the tourism sector (like lodging) and develop higher-quality experiences, leading to increased revenues.

Offering over 30 fast track to success programs annually, TEN has helped mentor over 400 individuals and business owners to better serve tourists in the region.

Destination Northern Ontario also supports eligible tourism organizations through their successful partnership program. An average of 70 tourism businesses, including those who provide fixed-roof accommodations, take part in this program annually leveraging the partnership fund by nearly 500%.

Exciting times for Northern Ontario

With 8.2 million visitors spending over 1.5 billion dollars annually in Northern Ontario it’s an exciting time for the region and the businesses who operate in it. For more information on business development opportunities and training programs for tourism businesses in the north, visit DestinationNorthernOntario.ca and follow Destination Northern Ontario on FacebookTwitter and Instagram to find out how #TourismRocks in the north.

About Tourism Rocks!

Tourism Rocks! was launched by Destination Northern Ontario to champion growth in Northern Ontario’s tourism industry. The campaign highlights the importance of tourism in the region and creates awareness about exciting career opportunities in the tourism sector

For more information, click here.