Unique Factors Shaping the Buffalo Lodging Market

As a border city, Buffalo has always been heavily dependent on Canadian visitors and American travelers stopping over en route to or from Canada for accommodation demand. Based on recent hotel market research and numerous reviews of hotels in the greater Buffalo-Niagara area that I have conducted, it is clear that traffic volume at land border crossings is impacting these border markets. Below is a brief timeline of developments in border crossing restrictions from 2020 to 2023.

As the one-year anniversary of the lifting of all COVID-19 border restrictions recently passed, I wanted to examine the correlation between key indicators of Buffalo’s lodging market and Peace Bridge crossing data, an international land border that connects Buffalo to Fort Erie in Ontario, Canada.

As illustrated above, the magnitude and duration of the impact of the COVID-19 pandemic has affected the two metrics slightly differently depending on the nature and extent of business restrictions and restrictions imposed on border crossings. Thanks to the availability of vaccines and the lifting of many business restrictions, occupancy generally improved in 2021, although the Omicron variant slowed the recovery in the latter part of the year. However, international border crossings declined in 2021, with the border remaining closed to all non-essential travel for much of the year and then reopening with heavy restrictions in place. With border restrictions fully lifted in early 2023, international crossings to Buffalo and occupancy levels have increased.

We note that 2024 will be the first year since 2019 that COVID-19 border restrictions will play no role in local border crossings or Buffalo hotel occupancy. Neither indicator has fully recovered to pre-pandemic levels, largely due to a third variable that plays an important role in both cases: exchange rates. Buffalo is a convenient stopover destination for Canadian travelers heading south for vacation, and U.S. tax exemptions have historically made shopping in New York an attractive weekend getaway for Canadians; However, these trips are more attractive when the U.S. dollar is not as strong, as was the case in 2018. Even though exchange rates were also lower in 2021, the Buffalo market did not enjoy the benefits usual given the aforementioned border restrictions.

Final Thoughts

The Buffalo lodging market has always benefited from notable demand created by Canadian travelers, and this source of demand will continue to play an important role in the future. Although occupancy levels have not fully recovered from the negative impact of the COVID-19 pandemic and associated border restrictions, double-digit annual growth has allowed market RevPAR to exceed prior levels. pandemic in 2022 and significantly exceed these levels in 2023. Data for 2024. illustrate a continued upward trend, reinforced by the impact of the solar eclipse, during which downtown Buffalo was on the path of totality for 3 minutes and 45 seconds.

Our positioning in local markets allows us to conduct primary interviews with key market players. This approach ensures that we obtain real-time information and current data for each market in which we operate. For more information about the Buffalo market or to help you make informed investment decisions that match your goals and risk tolerance, please contact Christian Cross, your local HVS. Upstate New York Hospitality Expert.