Accommodation services, 2018

Released: 2020-02-27

The accommodation services subsector reached $22.5 billion in operating revenue in 2018, up 4.5% from 2017. Ontario accounted for the largest share of revenue (29.5%), followed by British Columbia (21.3%), Alberta (19.0%) and Quebec (15.6%).

Similarly, operating expenses rose to $19.8 billion in 2018, up 4.5% from 2017. Salaries, wages, commissions and benefits (31.9%) contributed the most to expenses, followed by cost of goods sold (14.4%)—mainly for food products and alcoholic beverages.

In 2018, the operating profit margin (12.1%) was unchanged from the previous year.

The accommodation services subsector comprises two industry groupings: hotels, motor hotels and motels; and other accommodation industries. In 2018, hotels, motor hotels and motels accounted for 81.3% of operating revenue. In recent years, the increasing availability of alternative accommodations—such as private short-term accommodations through digital platforms—has been transforming the industry. The accommodation industry is benefiting from positive factors such as increasing international tourist visits and positive growth in household disposable income.

Hotels, motor hotels and motels

Total operating revenue for hotels, motor hotels and motels reached $18.3 billion in 2018, up 4.5% from 2017. This outperformed the growth in the number of international tourists in Canada (+1.2%) and the rise in total tourism expenditures (+2.8%). Ontario accounted for the largest share of revenue (30.5%), followed by British Columbia (22.0%), Alberta (16.4%) and Quebec (15.7%).

The largest share of sales revenue was generated by room or unit accommodation for travellers (70.2%), followed by meals and non-alcoholic beverages (11.9%), and alcoholic beverages (5.1%).

Operating expenses grew 4.3% to $16.1 billion, with 33.8% of total operating expenses coming from salaries, wages, commissions and benefits. The lower relative growth in expenses compared with revenue led to a slightly higher operating profit margin of 12.1%, up from 12.0% in 2017.

In 2018, e-commerce accounted for 29.8% of total sales. Among businesses that made e-commerce sales, 89.5% of hotels, motor hotels and motels offered the option to reserve through a third-party website. A company's own website (81.7%) and mobile applications (32.9%) were the next most popular e-commerce methods.

Other accommodation industries

The operating revenue for other accommodation industries increased 4.3%, reaching $4.2 billion in 2018. Alberta accounted for the largest share of revenue (30.3%), followed by Ontario (25.2%), British Columbia (18.3%) and Quebec (15.3%).

Alberta led all provinces in this industry group because a significant portion of this estimate is made up of rooming and boarding houses that provide accommodation at isolated working locations. This is common among industrial resource extraction operations, for example, those found in Northern Alberta. The low level of investment in Alberta's energy sector is still affecting other accommodation industries, and employment levels have yet to recover. In 2018, operating revenues in Alberta were still 23.4% lower than the 2014 peak.

Operating expenses increased 5.2% to $3.7 billion, with 23.7% of total operating expenses coming from salaries, wages, commissions and benefits. The profit margin declined from 12.6% in 2017 to 12.0% in 2018 because of higher growth in expenses than in revenue.

Contact information

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