After last year's hotel booking boom for Stampede, spending expected to level off

Following a record-setting number of hotel bookings during the 2023 Stampede, experts say those numbers, as well as hotel spending, are expected to level off this year — but that doesn't mean the hospitality industry is struggling.

Experts said hotel spending exploded last year, driving up room rates and pushing inflation in the hotel and travel industry to near double-digits over the past 12 to 18 months.

This year, however, is different.

"What we're seeing is a contraction in that trend," said Sean McCormick, vice-president of business development for data with Moneris, a payment service company. 

As of March, year-over-year spending has fallen 12 per cent, McCormick said.

"That's massive because usually in an industry like tourism, where you can pretty much predict the busiest day of the year, normally you would see a flat curve, plus or minus two per cent," he said. "So when we see year-over-year dollar volume growth off 12 per cent, that's enormous."

In 2023, hotel spending in Calgary on the first and last Saturdays of Stampede increased by 19 and 12 per cent respectively, according to Moneris's data.

McCormick said those numbers are not expected to grow by much this Stampede — if at all.

"I think you're going to see at least flat numbers year over year," he said. "I think that would be a big win for events like the Stampede, given the economic times that we're in."

Following restrictions on travel during the 2020 pandemic, spending in the hospitality and tourism industries briefly boomed. 

A recent BMO survey on summer spending insights found that despite the initial post-pandemic travel shock, travel activity has returned close to pre-pandemic levels. 

McCormick said that while increases in spending helped the industry recover, inflationary pressures also increased hotel prices.

Seeing spending levels plateau a little means the hotel inflationary bubble won't burst.

"It would mean that the Stampede was holding on to the gains from last year … rather than having it fall off a cliff a little bit," McCormick said.  

Short-term rentals seeing growth

Growth, however, isn't expected to slow on the short-term rental market, especially when it comes to Airbnb bookings.

Hosts saw a surge in revenue during the 2023 Stampede, earning a combined $9 million, while the average host made around $1,300 during the 10-day event. 

Matt McNama, senior communications manager for Airbnb, said a "spike" in bookings is expected this year as well, specifically from Canadian travellers and locals.

"This is a uniquely Canadian event specific to Calgary," McNama said. "So people are coming from all around the country to celebrate this." 

McNama said the average daily rate for an Airbnb is around $200, and while those prices can fluctuate, more people are finding short-term rentals offer a cheaper alternative to hotels.

As of April 2024, the Government of Alberta reported the average daily room rate being $163 a night. Prices typically surge during Stampede, with some downtown rooms exceeding $500 a night. 

Last year, hotel occupancy set a 10-year record with rates exceeding 95 per cent on some nights during the annual event. 

This year, occupancy is expected to be around 82 per cent, according to Sol Zia, executive director of the Calgary Hotel Association.

Zia said there are 15,500 hotel rooms across the city, with about 5,000 downtown. When those rooms fill up, short-term rentals and Airbnbs often pick up the slack, and so far that doesn't seem to be changing. 

"We do know that the short-term rentals pick up some of the demand when downtown is full, and downtown is full this first weekend and definitely midweek," Zia said.

Booking this year started early, Zia said, with a third of available rooms booked before Christmas. Another third were booked by March.

"We knew before coming into the Stampede that about 60 per cent of rooms were going to be occupied," Zia said, adding booking continues for the final weekend.

McNama said that besides supporting hosts, bookings help drive local economic growth, with over 60 per cent of Calgary's Airbnb listings in areas of the city without hotels. 

Around 50 per cent of guests in these areas, McNama said, spend directly where their listing is located.

"What they're doing is they're spending it in the mom-and-pop shops and restaurants — local communities that would otherwise not be seeing that spending."