STR: Central/South America, Mexico and Canada hotel performance for Q1 2019

Hotels in the Central/South America region reported mixed performance results during Q1 2019, according to data from STR.

U.S. dollar constant currency, Q1 2019 vs. Q1 2018

Central/South America

• Occupancy: +0.6% to 58.1%
• Average daily rate (ADR): -4.5% to US$100.35
• Revenue per available room (RevPAR): -4.0% to US$58.27

Local currency, Q1 2019 vs. Q1 2018

Rio de Janeiro

• Occupancy:+12.2% to 63.8%
• ADR: +5.4% to BRL403.46
• RevPAR: +18.3% to BRL257.40

The absolute occupancy level was the best for a Q1 in Rio since 2015, while the ADR value was the highest for an opening quarter since 2016. STR analysts note that March specifically produced significant year-over-year growth in the market with a boost from Carnival. Occupancy and ADR were up 25.0% and 30.0%, respectively, leading to 62.5% growth in RevPAR. Also helping performance in the market during the quarter was a 2.6% decline in supply, which strengthened hotelier market share. As noted in STR’s Global Hotel Study, property closings have been common as an uncertain economic environment and a lack of consistent corporate and leisure business has created difficult operating conditions.

Santiago, Chile

• Occupancy: -2.5% to 67.8%
• ADR: +6.2% to CLP82,917.47
• RevPAR: +3.5% to CLP56,208.62

According to STR analysts, weekday RevPAR in the market grew 4.7% during Q1, while weekend RevPAR was mostly flat (-0.1%). This is an indicator of more corporate business in Santiago, which has been consistent in the market. Unlike other destinations in the region, Chile has displayed relatively stable economic and political conditions, which has led to large brand investment in the country. 

Mexico Q1 2019 hotel performance
Mexico’s hotel industry reported negative performance results during Q1 2019, according to data from STR.

Compared with Q1 2018:

• Occupancy: -4.9% to 61.9%
• Average daily rate (ADR): -2.4% to MXN2,554.40
• Revenue per available room (RevPAR): -7.2% to MXN1,582.40

The absolute occupancy level was the lowest for any Q1 in the country since 2013. The year-over-year dip in occupancy came as a result of healthy supply growth (+2.7%) and weakened demand (-2.3%). STR analysts note that beyond the continued security concerns affecting tourism, the government’s decision to disband the Mexico Tourism Board has begun to affect performance levels, as the combination of an unsafe image of the country and the lack of an organized approach might have travelers looking at alternative destinations.

Among STR’s defined markets for the country, Mexico Northeast registered the largest increases in ADR (+5.1% to MXN1,328.38) and RevPAR (+2.7% to MXN821.83).

Mexico Central South experienced the only rise in occupancy (+1.3% to 51.0%) and the only other lift in RevPAR (+2.5% to MXN567.11).

Mexico Northwest posted the only double-digit decrease in occupancy (-12.0% to 56.6%), which resulted in the only double-digit drop in RevPAR (-13.0% to MXN1,783.00).

Mexico Central North saw the second-largest decline in RevPAR (-8.5% to MXN1,094.51), due primarily to the second-steepest drop in occupancy (-8.5% to 58.9%).

Only two markets reported decreases in ADR: the Yucatan Peninsula (-4.8% to MXN4,053.03) and Mexico Northwest (-1.1% to MXN3,150.28).

Canada Q1 2019 hotel performance
The Canadian hotel industry reported mostly positive year-over-year results in the three key performance metrics during Q1 2019, according to data from STR. 

Compared with Q1 2018: 

• Occupancy: -0.5% to 56.7%
• Average daily rate (ADR): +1.2% to CAD148.68
• Revenue per available room (RevPAR): +0.7% to CAD84.24

The absolute ADR and RevPAR levels were the highest for any Q1 in STR’s Canada database.

A February report from Destination Canada showed that overnight arrivals of international visitors to the country were up 1.0% during the first two months of 2019. STR analysts point to the influx of visitors as a reason for healthy hotel demand (+1.1%), but higher supply (+1.6%) put slight pressure on occupancy levels.

In absolute values, March was Canada’s top month of the quarter for occupancy (60.5%) and RevPAR (CAD89.86), while February was Canada’s top month in Q1 for ADR (CAD149.96).

Among the provinces and territories, Prince Edward Island recorded the quarter’s largest increases in each of the three key performance metrics: occupancy (+3.2% to 38.1%), ADR (+4.4% to CAD111.74) and RevPAR (+7.8% to CAD42.60).  

Manitoba experienced the second-highest rise in occupancy (+1.6% to 62.1%).

British Columbia saw the second-largest jump in RevPAR (+2.9% to CAD110.25).

Newfoundland and Labrador posted the steepest decline in each of the three key performance metrics: occupancy (-5.9% to 38.1%), ADR (-7.4% to CAD120.67) and RevPAR (-12.9% to CAD46.01).

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