Canadian hotel owners are trying to revive their business after losing most of their customers during the first few weeks of the coronavirus pandemic, but occupancy in Toronto, Vancouver and other top destinations remains extremely low, with no end in sight.
In the past week, just one-quarter of hotel rooms in the country were occupied, according to new data from hotel research firm STR. That was higher than the 12-per-cent occupancy rate in the first week of April when about half the hotels in Canada shut their doors after the country closed its borders and halted non-essential activity.
The meagre occupancy for the third week in June is two-thirds lower than normal, in what is typically a busy travel period. Revenue per available room, a key indicator of profitability and known as RevPar, was $28.33 from June 14 to 20. That was higher than the $12.17 reached in April but down 79 per cent from the third week in June last year, according to STR.
“It has been pretty bad. Our industry has been the hardest hit,” said Deepak Ruparell, president of Silver Hotel Group, which owns 20 hotels in Canada including Hilton, Delta and Novotel brands in the major cities. Mr. Ruparell made the decision to temporarily close most of his hotels during the first two months of the pandemic. He laid off 85 per cent of staff and saw revenue vanish overnight.
Now that provinces are starting to lift restrictions, 19 of his hotels are open again. But he said the occupancy rate is only about 10 per cent. The biggest chunk of his clientele – business people and conference attendees – are non-existent, and he said if some of the travel restrictions are not lifted the recovery will take even longer.
“We have no one coming from the U.S. or globally. Internal travel is minimum,” he said.
Restrictions on social gatherings, restaurant bans and 14-day quarantines for out-of-country visitors have devastated most hotels.
Mr. Ruparell and dozens of executives from hotels, tourism companies, airlines and chambers of commerce have signed an open letter urging Ottawa to ease up on the travel restrictions. But public-health officials have warned an easing could impede efforts to stop the spread of the virus.
The situation is particularly rough in Toronto, where Ontario just started to allow more businesses to reopen in the country’s biggest city. Performance improved incrementally from April, with an occupancy rate of 19 per cent last week, down 78 per cent from the previous year. RevPar was $20.74, which was 89-per-cent lower than last year.
Vancouver was slightly better as British Columbia had begun to reopen earlier. The hotel occupancy rate was 28 per cent in the third week in June and RevPar was $35.63. Though, that is still down more than 80 per cent over the previous year.
One B.C. hotelier with mid-priced hotels stayed open throughout the pandemic. There were no customers at its three Hotel Zed locations, but its five Accent Inns were about half full during the strictest part of the lockdown. Its rooms were paid by community donations and occupied with health care workers. They are now more than 50-per-cent full. Spokeswoman Trina Notman said, although “everyone is itching for a trip,” the hotel will have to keep rates low because demand is so much weaker without the regular influx of visitors.
Other popular destinations, Ottawa, Montreal, Banff, Alta., and Niagara Falls, Ont., are also attracting more customers, although occupancy is still under 25 per cent and RevPar is down by at least 85 per cent.
“It is not as dire as it used to be,” said Jan Freitag, a senior vice-president with STR, adding that you could hardly call this a recovery. “It is less bad.”
Mr. Freitag said hotels are starting to see leisure travellers or people who had been cooped up at home for months. “That helped with occupancy,” he said.
As for business travellers and conferences, Mr. Freitag does not know when that will resume. He said there are many unanswerable questions such as whether companies will allow their staff back on the road, whether local governments will allow large gatherings and whether people will feel and be safe in big groups.
The Hotel Association of Canada estimates about one-third of the 8,200 hotels in Canada are still closed. The association is recommending hotels not provide daily housekeeping services during a customer’s visit to limit the interaction between staff and guests. Hoteliers such as Silver Hotel Group have installed hand sanitizer stations and decals on the floors showing people where to stand. Cleaning wipes are available for people to clean their luggage.
Mr. Ruparell said he is facing the most difficult period in his 44 years in the hotel business. His hotels recovered quickly after the severe acute respiratory syndrome outbreak in 2003 and after the global financial crisis and Great Recession in 2009.
But he said this time is different. “We have never had our borders closed,” said Mr. Ruparell. “We were expecting a downturn, not a 95-per-cent correction.”
About 10 rooms are booked, on average, in his 420-room Hilton Toronto Airport.
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