British Columbia Hotel Association faces hurdles in trying to get more hotels builts

In British Columbia, Mike Macleod Director of Operations at the BC Hotel Association, also agreed 2023 was a solid year. “RevPAR was up. However, we started to plateau in a couple of leisure markets like the Okanogan. Some of that can be tied back to the issues with the wildfires. The major markets are really strong and some even had a record September, due mostly to a series of large events and big conferences.

Profile shot of Mike Macleod Director of Operations at the BC Hotel Association

Mike Macleod, Director of Operations, BC Hotel Association

Overall Macleod observed that “The old ‘Road Warrior’ type of travel has not come back yet, which has been interesting because in the United States it has… On the international travel side, Vancouver remains strong.  The airport numbers are reported to be at 90% passenger loads and that missing 10% is the  Chinese tourist and Macleod feels that won’t return until there is a change in government.

We asked if the rates are flowing to the bottom line… Macleod echoed the same sentiment that we see happening across the country. “Not quite as much as you would have thought because the price of everything has gone up so fast it is easting into rate growth gains. We are also dealing with massive property tax increases and commercial tax increases”.

In BC, this is partly because of the limited supply of hotels. If someone significantly overpays for a property, suddenly everyone’s property tax goes through the roof. Most of these assessment issues are in the appeals process now, as they were due at the end of January.

From an advocacy perspective, BCHA has been working on getting more hotel rooms built with a push towards helping to loosen the regulations on the development side of the business. These efforts have been focused on cutting down the red tape all the way down to the municipal level.

Macleod indicated that the provincial government is working with the sector. “There is also an effort coming from both levels of government on prioritizing infrastructure. They are looking at better air transportation, fixing the roads etc., all the infrastructure that is needed that goes along with travel. It’s a big task, but I think both levels of government are looking at the next 10 years to try to get some of this fixed.”

On the progressive side of the ledger, Macleod pointed to where the government is looking at what they’re calling a ‘night economy’. Basically,  its what a 24-hour business environment would look like. “This could help the foodservice side of the business for sure and other businesses. Having more traffic downtown and businesses open could play a role in keeping the homeless moving out of the core. This could improve security in the downtown core which ultimately helps our properties.”

Lastly, Macleod addressed the short-term rental issue. “We need more staff and that means more housing is needed. We commissioned a study indicating that there are over 10,000 homes that could be brought back onto the housing market. That is significant and would be very beneficial. We have supported the government’s initiative to  tighten short-term rental legislation that passed and will come into effect in May. We are hoping this will have an impact.”

Looking forward into 2024 Macloed states, “I think we’ll see a flattening out period at approximately 4-5% growth, which compared to the past year doesn’t sound as good. But whether the growth rate continues, if costs continue to skyrocket on everything, remains to be seen.”

This is an excerpt from the Foodbuy 2024 Hotel Guide. To read the guide, click here.

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