How Hinton’s Hospitality Sector Bounced Back: Key Insights from 2015 to 2024

1) Overview of the Hinton Market:

Hinton, Alberta, is a critical hospitality submarket within the larger Alberta North Area, with a total of 1,277 rooms distributed across various economy midscale and upper midscale properties. The market is influenced by nearby attractions such as Jasper National Park and offers a combination of leisure and business accommodations. The market is showing resilience and gradual improvement, with key performance metrics such as occupancy, ADR (Average Daily Rate), and RevPAR (Revenue per Available Room) playing vital roles in gauging its performance.

Alberta Market Size Overview:

Alberta Total Market:
- Total Hotels: 666 properties
- Total Rooms: 45,000
- 12-month occupancy rate: 58.2%
- ADR: $220.33 – RevPAR: $128.22

Source: Costar

Alberta North Market Overview:

Alberta North Market:
- Total Hotels: 160 properties
- Total Rooms: 11,000
- 12-month occupancy rate: 51.5%
- ADR: $173.95
- RevPAR: $89.53

Source: Costar

2) Hinton Complete Market Overview:

Total Number of hotels in Hinton: 21
Hinton Total Rooms: 1,277 rooms.
Market Segments: Predominantly economy midscale and upper midscale properties, catering to both business and leisure traveler’s.

The Hinton hospitality market faces moderate challenges with slightly lower occupancy rates and ADR compared to the broader Alberta North market. However, the market remains stable with room for growth.

3) Midscale and Upper Midscale Market Performance in Hinton:

Midscale and upper midscale properties form the core of Hinton’s hospitality offering. These properties cater to budget-conscious travelers, corporate guests, and leisure tourists.

Midscale Properties:
- Occupancy: 50.9%
- ADR: $126.08
- RevPAR: $64.18
Upper Midscale Properties:
- Occupancy: 54.9%
- ADR: $160.61
- RevPAR: $88.13

Source:- Costar

The upper midscale properties outperform the midscale segment in terms of both occupancy and ADR. This suggests that guests are willing to pay more for added comfort and brand assurance in the upper midscale category, leading to higher RevPAR for these properties.

4) Key Projects and Developments in Hinton:

Several infrastructure projects are underway in Hinton, which are expected to positively impact the local economy and, consequently, the hospitality market:

Boutin Avenue Development: This affordable housing project involves the creation of modular homes. Increased population growth could lead to a higher demand for hospitality services.
Hinton Geothermal Project: The geothermal energy initiative is aimed at diversifying the local economy and reducing the community’s carbon footprint. This project may attract eco-tourism and businesses related to renewable energy.
Hinton Water Treatment Plant: Ensures sustainable water supply for residents and businesses, including the hospitality sector.
Maxwell Lake Pedestrian Bridge Project: This infrastructure project enhances accessibility to local parks and improves visitor experiences in the region.
PAR999 Holdings Inc. Development: This large-scale project, involving a hotel/resort, conference center, retail, and food outlets, is set to elevate Hinton’s status as an educational and career destination, leading to increased demand for accommodation in the area.

Source:- Hinton.ca and zillow.com

5) Infrastructure Impact on Hospitality:

The ongoing infrastructure improvements, such as the water treatment plant and the Maxwell Lake pedestrian bridge, are set to have long-term positive effects on the Hinton hospitality market. These projects will improve the quality of life for residents and visitors, making Hinton a more attractive destination. Additionally, the development of PAR999 Holdings’ hospitality resort and conference center is expected to increase the demand for accommodations, particularly in the upper midscale segment.

6) Key Takeaways:

Upper Midscale Performance: Upper midscale properties show better results compared to midscale properties, particularly in terms of ADR and RevPAR.
Midscale Growth Potential: Midscale properties could improve their performance by focusing on enhancing guest experiences and capitalizing on niche markets such as eco-tourism, aligned with the geothermal project.

Hinton Market From 2015 to 2024

Occupancy Trend:

Initial Decline (2015-2016): In August 2015, the market had an occupancy rate of about 50%, which sharply dropped to around 42% by August 2016. This significant decline likely reflects the economic downturn related to the collapse in oil prices, which had a considerable impact on business and leisure travel demand.
Gradual Recovery (2017-2021): After 2016, the occupancy rate started a slow recovery. By August 2019, occupancy stabilized at around 48-49%. However, the pandemic of 2020 caused a notable dip in occupancy again, which plummeted back to around 40%.
Post-Pandemic Recovery (2022-2024): The occupancy rate rebounded sharply starting in 2021. By August 2022, the occupancy rose to approximately 52%, reaching its highest level post-pandemic. In the subsequent years, occupancy steadied at around 52%, reflecting a strong recovery.

ADR (Average Daily Rate) Trend:

Stable Performance (2015-2019): The ADR remained relatively stable from 2015 to 2019, fluctuating between $120 to $140. Despite occupancy challenges, hotels managed to maintain stable room pricing, showing resilience during the early period of recovery.
Pandemic Impact (2020): During the pandemic in 2020, the ADR saw a sharp decline. This can be linked to the overall drop in travel demand and the need for hotels to lower their rates to attract the reduced number of travelers.
Significant Growth Post-Pandemic (2021-2024): After the pandemic, ADR experienced a rapid growth trajectory, with a sharp increase by August 2023 to over $180. This increase in room rates reflects the recovery in demand, coupled with inflationary pressures and an increase in the willingness of travelers to pay higher rates post-pandemic.

RevPAR (Revenue per Available Room) Trend:

Sharp Decline (2015-2016): RevPAR, which is influenced by both occupancy and ADR, experienced a sharp drop between 2015 and 2016, correlating with the fall in occupancy during this period.
Slow Recovery (2017-2020): From 2017 to 2019, RevPAR showed a moderate recovery, aligning with slight increases in occupancy and stable ADR during this period. However, the pandemic in 2020 resulted in a significant dip in RevPAR, mirroring the impact on occupancy and rates.
Strong Recovery Post-Pandemic (2021-2024): The post-pandemic period saw a sharp rise in RevPAR, driven by both recovering occupancy and the sharp increase in ADR. By 2023, RevPAR reached its highest point, nearing $160, which indicates that hotels were not only filling more rooms but also doing so at higher rates.

Key Takeaways:

Occupancy Recovery: While the occupancy rate experienced fluctuations over the years, the post-pandemic period saw a strong recovery, stabilizing at around 52% by 2023-2024.
ADR Growth: ADR saw significant growth post-pandemic, reaching record highs in 2023-2024, indicating that hotels have successfully increased room rates, leveraging the recovering demand.
RevPAR Surge: The combination of recovering occupancy and increasing ADR has driven RevPAR to its highest levels in recent years, highlighting the market’s overall strength and resilience.

The market’s recovery, particularly after 2020, signals strong demand, with properties benefitting from higher pricing power and increased travel activity. This trend suggests positive momentum for the hospitality sector in the region.

The Hinton hospitality market has seen significant change over the past decade, from economic challenges to a strong post-pandemic recovery. With rising occupancy rates, increasing ADR, and new infrastructure projects, the market is well-positioned for growth. The upper midscale segment, in particular, offers strong potential for higher revenue and demand.

Now is the time to explore opportunities in Hinton’s hospitality sector. By focusing on guest experience, eco-tourism, and aligning with new developments, businesses can take advantage of this growing market.

Interested in learning more about the Hinton hospitality market? Contact me today for insights, investment advice, and strategies to help you succeed in this promising market. I am here to help you take the next step.

Email: gurveen.bindra@royallepage.ca
Cell: (306) 221-1322

Let me guide you towards informed decisions and successful investments.