Banff Is Transforming Into a Retail Hotspot

Banff, Alberta is known around the world for its breathtaking scenery and outdoor adventures. Soon it may be known as a shopping destination.

The town's main streets have traditionally been populated by a mix of quirky souvenir shops, gemstone retailers and gourmet popcorn makers.

Lately, however, Banff’s retail scene has begun to evolve.

“Users are waiting on average four years to find a space in Banff, and most end up having to buy out existing businesses,” says CBRE Calgary’s Ania Gryzewski, who leases retail space there. “There’s been tremendous interest in Banff in recent years, especially from international retailers.”

Pandemic Pause

Like in other tourism-driven towns, pandemic-related travel restrictions put a damper on Banff’s retail sector. Forward-thinking property owners took advantage of this downtime to refresh their spaces. “The pandemic gave landlords the chance to renovate and redevelop their assets,” says Gryzewski. “So when tourism recovered, they were ready to welcome visitors.”

Cascade Shops, Banff’s only indoor mall, underwent a full transformation, with owners investing $30 million to refresh the interior, exterior, hotel, base building systems and parking, according to Gryzewski.

Several hotels were also revamped. Oxford Properties in 2023 acquired The Rimrock Resort Hotel, one of Banff’s luxury hotels, with plans to invest up to $100 million to improve the property’s sustainability performance and visitor experience.

Oxford also spent $35 million renovating the iconic Fairmont Banff Springs, refreshing guest rooms and unveiling the Fairmont Gold and Signature Suites collections. Oxford also upgraded facilities and guest rooms at nearby Fairmont Chateau Lake Louise, including an eco-friendly thermal wellness facility.

“Banff is one of North America’s top-performing hotel markets,” says Gryzewski. “All these visitors need places to stay, eat and shop, so these investments bode well for the local economy and retail’s prospects are exciting.”

Bouncing Back

Banff’s retail sector has been benefitting from the surge of international travel since the pandemic.

Hotel performance in Alberta’s resorts has more than recovered from the pandemic, with revenue per available room (RevPAR), a key indicator of hotel market health, growing 18.9% between 2022 and 2023. The average daily rate (ADR) for rooms was $441.89, more than three times the provincial average room price. “Since tourism began picking back up Banff has been on overdrive,” Gryzewski says.

Last year the park was so popular that car traffic often was at a standstill. Approximately 1,200 vehicles used the Lake Louise lot daily in 2023, with staff refusing entry to over 3,000 cars each day. This summer Parks Canada is doubling the parking fees at the Lake Louise lakefront lot to encourage visitors to take the shuttle and reduce congestion.

“Banff National Park welcomes more than 4 million visitors every year and that number is increasing,” says Gryzewski. “Retailers want to be at the heart of this action.”

The interest has been translating into strong sales and leasing activity for Gryzewski and her team. Last year they helped Columbia Sportswear and Canada Goose set up stores at Cascade Shops. They also assisted Herschel Supply Co. and Arc’teryx in opening locations along Banff Avenue. More recently they worked with Lululemon to open a new 6,100 sq. ft. space, nearly triple its original footprint in Banff.

“Outerwear brands in particular are having a lot of success with standalone shops in Banff,” says Gryzewski. She points to Canada Goose, whose Banff sales outperform sales at their store in Calgary’s largest mall, Chinook Centre.

“Canada Goose was one of Banff’s first big post-pandemic success stories,” Gryewski says. “It’s been a raging success.”

Her team has also noted increased deal activity in the local restaurant sector. “People come here to see the sights, do outdoor activities and shop along Banff Avenue,” says Gryewski. “But they also need places to grab a quick bite or sit down for a nice dinner. The whole retail sector is benefitting from this tourism boom.”

New Frontiers

Despite the strong demand, retail development activity in Banff is limited by a building moratorium prohibiting new construction due to the town’s location within a national park and world heritage site. This contributes to the market's tightness, pushing the retail vacancy rate down and driving rental rates above $100 per square foot.

Gryzewski and her team have been involved in most of Banff’s retail transactions over the last five years and have developed a deep knowledge of market opportunities. “Investors believe in this market because it’s a world-class destination,” says Gryzewski. “We can identify opportunities before they are known and help bridge the gap between international prospects and local landlords.”

She believes the next step for Banff retail is the return of luxury tenants. She points to the ski resort town of Aspen, Colorado, as an example of what the future might hold for Banff. Aspen recently saw a wave of store openings from high-end designer brands such as Chanel, Hermès and Bottega Veneta.

“Banff is on an incredible retail trajectory and other ski destinations suggest we’re just getting started,” says Gryzewski. “Retailers considering opening a location here should know we’re here to help. We’re entrenched in this community and can shake things loose or talk to the right people to make deals happen.”