Why Are Hotels in Banff so Expensive? (Explained!)

The Moraine Lake Lodge in Banff is one of the park's most expensive hotels

Banff’s hotel prices have skyrocketed over the last ten to fifteen years. Nowadays, hotels typically cost more than CAD 500 per night in the busy summer months. How did everything get to be so expensive? You’ll read it in this post.

A trip to Banff National Park is on many people’s wishlists as the park’s stunning beauty has a strong appeal. However, the cost of lodging is becoming increasingly out of reach for the average person.

Sure, if you camp in the park, you can reduce your accommodation costs significantly, but if you don’t like this kind of holiday, you’ll need to stay in b&bs or hotels.  

For many people’s budgets, the average cost of more than CAD 500 per night during the high season may be a bit much. I researched the causes of these extremely high prices. Let’s take a look and dive into the reasons behind it.

High Demand and No Supply (Hotel Occupancy Rates)

Although I couldn’t find official statistics on Banff in particular, the average hotel occupancy rate in Alberta has climbed to 31% since 2019. The rate was “just” 25% that year, according to the September 2022 Hospitality Market Insights Report.

Additionally, after COVID, there has been an upsurge in demand during the summer. In comparison to the same months in 2021, the Alberta Tourism Market Monitor reported a 6.2% rise in visits for July and a 5.8% increase for August.

I did some research on typical hotel room costs. According to the Alberta Tourism Market Monitor, the average daily room rate (ADR) in Banff was CAD 251,12 for 2021.

Surprisingly, the town of Jasper in Jasper National Park, which borders Banff and is the second-most visited park in the province, had an ADR of CAD 256,81. Numer three on the list is – not surprisingly – Canmore. In this mountain town bordering Banff National Park, the ADR is CAD 181.66.

Boom in Tourist Numbers

Banff National Park has seen significant growth in its tourist numbers over the last decade. In 2011, Banff drew 3.15 million tourists; in 2019, this number was 4.12 million, as Statista data reveals. That is a whopping 30.8 percent increase in not even a decade. 

Banff is by Far the Most Visited National Park in the Country

Banff is by far the most popular national park in Canada. With more than 4 million annual visitors, Banff has about 40 percent more yearly visitors than number two Jasper National Park.  

Banff Has Two of the Country’s Best Rated Resort Hotels

Fairmont Château Lake Louise

Statista statistics show Banff has two of the ten best-rated Canadian resort hotels (2021): the Fairmont Château Lake Louise and the Fairmont Banff Springs Hotel. They scored 92.23 and 90.86 out of a hundred, respectively, which puts them in the 6th and 10th position.

Low Canadian Dollar

Due to the Canadian dollar’s long-standing advantage over the American dollar as a travel currency, Banff is a popular destination for tourists worldwide. 

However, the value of the Canadian dollar is misleading, as many goods and services have prices far greater than their American equivalents. It roughly balances out the benefit of the lower Canadian dollar.

Envy Evoking Shots on Social Media

The internet has made the world more visible. Social media like Facebook and Instagram have helped spread the word about Banff National Park’s stunning beauty, which has increased interest in the park. 

Increased Tourism, but no Development Possible

The Fairmont Banff Springs Hotel with the Bow River in the foreground

While the visitor numbers have increased for the reasons mentioned above, development is impossible due to park regulations. The town of Banff has reached its limit, so further expansion is impossible. 

In 1998, the federal government restricted commercial expansion to 350,000 square feet as unchecked development would endanger the park’s natural integrity.

As the number of tourists has increased, hotel rooms have become more exclusive, which has caused a significant rise in hotel room prices.

Canmore is becoming increasingly popular among travelers as a place to stay the night because its hotels are a little bit more affordable and are only a 20-minute drive from Banff.

While the desire to protect nature obviously makes sense, it is ironic that the park was established in 1885 with tourism in mind. 

Increased Advertising of the Park

Tourism organizations at the local, provincial, and federal levels continue to spend millions of dollars to draw tourists. 

The province of Alberta reaps significant benefits from tourism in the park, as do the towns of Banff and Lake Louise, obviously. The latter two are also entirely reliant on it. 

Just take a look at the recent advertising for the town of Banff. The town boosted its advertising output in most media sources over the previous three years, according to Banff’s Communications and Marketing Department’s 2021 report. Due to COVID, advertising outings decreased significantly in 2020 but returned to normal or increased in 2021.

Selected Sources:

  1. Statista 
  2. Hospitality Market Insights Report 
  3. Alberta Tourism Market Monitor
  4. Town of Banff 

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As a former Banffite, I love writing about my favorite part of the world. I keep coming back to enjoy the park's mesmerising beauty. It never fails to impress me. With my extensive knowledge of the area, I aim to provide you with the best information on Banff that you can find on the internet.

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