Halifax hotel rates jump 20% as visitor numbers climb

People visiting the Halifax area in 2023 are paying about 20 per cent more for a hotel room compared to last year.

According to Ross Jefferson, the president and CEO of Discover Halifax, the average daily rate for a hotel room in and around the city jumped from $184 in 2022 to $219 in 2023.

Jefferson said rising room rates are related to a "significant" 17 per cent increase in visitor numbers over the previous year.

"It is a function of supply and demand. As rooms become less and less available and more scarce, the prices go up," he said. "We do know that the big events that we've had and been hosting have been pushing that up."

In 2020, during the COVID-19 pandemic, the average daily rate for a Halifax-area hotel room was just $112, according to real estate firm CBRE Canada.

Jefferson said there was a lot of pent-up demand because of the pandemic and cities across Canada have seen a "strong resurgence" in visitor numbers.

Traveller compromises

According to Jan Freitag, national director of hospitality analytics at real estate data giant CoStar, the occupancy rate in Halifax is 66 per cent, which is roughly the same as Montreal and slightly lower than Toronto.

Freitag said with inflation rates expected to come down, hotel rate increases should slow but he expects them to continue to rise over the next year.

It's possible, he said, that in order to cope with the higher rates, travellers will have to make compromises like choosing a two-star rather than a three-star hotel, shortening their trip or cutting back on planned activities.

Freitag said higher hotel prices do not mean that people will stop travelling.

"It's just a question of trade-offs, because if people want to go on vacation or if they have a business trip and they have to go, those trips will still happen," he said.

Stan Buguiera and his wife, who are from Lloydminster, Alta., chose a mid-priced chain hotel for their stay in Halifax. He said they paid $260 a night and had to adjust their travel plans to budget for the cost of accommodation.

They were forced to shorten their stay from the two weeks they had originally planned to eight days, he said.

"It really blows a hole in your vacation budget," he said. "For what we're paying here, it's nothing fancy, it's basic. We've travelled a bit over the years and when you get up over that $200 a night, you're expecting like a pretty posh hotel."

'Growth challenges'

Jefferson said with new hotels opening in the Halifax area this year and others in the development stage there should be an easing of the imbalance between supply and demand.

In the meantime, visitors seeking the best rates should plan early and book directly through the hotel, Jefferson said.

"We need more properties opening up, but it's part of the growth challenges we have here in a community like this," Jefferson said.

"We're really delighted to see all of the activity and the vibrancy that's coming back to the tourism industry."

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