Canadian Hotels Post First Decline Since Spring

November marks a turning point for the sector

Canada’s hotel industry recorded its first year-over-year decline in key performance indicators since April, according to CoStar’s November 2025 data. National occupancy slipped to 61.6%, down 1.0% from a year earlier, while revenue per available room (RevPAR) fell by the same margin to CAD120.70. Average daily rate (ADR) remained broadly flat at CAD195.94, suggesting that the revenue decline was driven primarily by weaker demand rather than aggressive discounting.

Ontario leads the downturn

Ontario emerged as the province most affected by the slowdown. Occupancy declined by 4.3% to 64.5%, ADR fell 4.0% to CAD214.35, and RevPAR dropped sharply by 8.1% to CAD138.32. The scale of the decline highlights the pressure facing Canada’s largest provincial market, where hotels are increasingly exposed to shifts in business travel, consumer spending and event-driven demand.

Toronto and the high-base effect

Among major markets, Toronto posted the steepest declines in pricing and revenue performance. ADR decreased by 10.0% year over year, while RevPAR fell 11.6%. The sharp contraction reflects a difficult comparison with November 2024, when demand was unusually strong due to Taylor Swift’s Eras Tour. The absence of similarly large-scale events in 2025 exposed the city’s reliance on major entertainment-driven demand spikes.

Edmonton signals regional fragility

Edmonton recorded the largest occupancy drop among major markets, with a 5.5% decline to 56.2%. This underscores the vulnerability of regional hotel markets to fluctuations in corporate travel and local economic conditions, particularly in energy-linked economies such as Alberta.

A more volatile outlook for 2026

While the national decline remains modest, November’s figures point to increasing volatility across Canada’s hotel industry. After a prolonged post-pandemic recovery, the market is entering a phase where uneven demand patterns, event dependency and macroeconomic headwinds are becoming more visible in performance data.

As reported by International Investment experts, the first decline since spring 2025 does not indicate a structural downturn but rather a normalization phase for Canada’s hotel market. In 2026, operators and investors are likely to focus more on revenue management discipline, demand diversification and reducing exposure to one-off event cycles, particularly in large urban markets such as Toronto.