Skip to main content
Complete Olympic Games coverage at your fingertips
Your inside track on the Olympic Games
Enjoy unlimited digital access
per week for 24 weeks
Complete Olympic Games coverage at your fingertips
Your inside track onthe Olympics Games
per week
for 24 weeks
// //

Sparkling Hill Resort in Vernon, B.C. Accommodations in the Okanagan Valley retained the highest occupancy levels in the past year.


After the unprecedented collapse of demand in 2020, the Canadian hotel industry hit rock bottom in the first quarter of 2021. Average occupancy was 27 per cent, the lowest level for a quarter on record.

The sector is counting on pent-up leisure-travel demand – or “revenge travel,” as one analyst calls it – to spark a comeback this summer.

“There is huge expectation of a significant surge in demand beginning the second half of this year,” says Brian Flood, vice-president and practice leader of Cushman & Wakefield’s hospitality and gaming group in Canada. “Resorts in particular are seeing very strong advance bookings, and some are sold out for the summer – at significantly higher rates.”

Story continues below advertisement

An increase in summer bookings, the fulfilment of which depends on the easing of provincially mandated lockdowns expected this month, offers hope in dark times that one hotel association compared to the Great Depression.

For the past 15 months, more than two-thirds of hotel rooms across the country sat empty as international travel to Canada declined 93 per cent. Even as hoteliers knew that discounting room rates wouldn’t generate demand in this environment, average room rates tumbled to $113, from 2019′s record high of $163. Very low occupancy and depressed room rates caused the revenue per available room, or RevPAR – the industry’s key performance indicator – to plummet 60 per cent, to $42, compared with $106 before the pandemic, according to the latest industry reports.

Resorts favoured

Sparkling Hill Resort in the Okanagan Valley. Small-town markets performed better than large-city markets amid the pandemic.


The pandemic has affected every type of hotel, from economy to full-service, but small-town markets performed better than large-city markets.

Resorts and smaller hotels in B.C.’s Okanagan lake and wine country experienced among the lowest RevPAR declines in Canada, at 33 per cent, as staycationers opted to avoid urban areas when restrictions were lifted last summer, Mr. Flood says.

Investor interest in resorts “has increased dramatically,” he adds. “We’re currently working on five resort [acquisitions].”

Conversely, “Toronto, Montreal, Ottawa – where hotels are reliant on conferences and international travellers – there’s just very little demand,” Mr. Flood says.

Of Canada’s large cities, Vancouver had the highest RevPAR between March, 2019, and 2020, at $56; the Atlantic provinces had the weakest, at $34. Montreal saw the steepest RevPAR drop of 74 per cent, from $137 to $35, followed by Toronto’s 70 per cent, from $155 to $46.

Story continues below advertisement

New hotel

Hallmark Hospitality’s new, fifth hotel is expected to open in Vancouver after the hotel industry recovers.

Zeidler Architecture

Despite the precipitous declines in revenue, plans for a new hotel in Vancouver are still going ahead.

The developer, Hallmark Hospitality, owns airport hotels in Calgary, Edmonton and Toronto. The new hotel is the company’s second hotel in Vancouver’s city centre.

“The worst is behind us,” says Al Remtulla, Hallmark’s Vancouver-based president, pointing to surges in bookings in the U.S. and Australia, where restrictions have relaxed more quickly.

Still, he predicts, “we’re looking at least three years ahead to see a normalization of revenues.”

Global travel data firm STR also forecasts a return to prepandemic hotel revenues by 2024. Destination Canada says 2026. However, many global analysts suggest that 20 per cent of business trips may never come back owing to the impact on the market of digital collaboration.

According to Mr. Remtulla, revenue has dropped 74 per cent at his airport hotels – Best Western Plus in Toronto, Best Western Premiere in Calgary and Sheraton Hotel in Edmonton – and 87 per cent at his Ramada by Wyndham hotel in Vancouver.

Story continues below advertisement

“A combination of factors precluded us from going bankrupt,” he says. Strong government support allowed for nominal operating costs, deferred taxes and retention of “hard to replace” management staff – a dedicated crew that took on tasks normally handled by laid-off employees (who were among 250,000, or 80 per cent of the work force, to lose jobs, according to the Hotel Association of Canada). He also arranged mortgage payment deferral programs with his bank.

Few transactions

Despite the financial pressure, Mr. Remtulla did not opt to sell his underperforming properties. “When business is good, it’s really good,” he contends. “Especially in Vancouver.”

Indeed, the industry finished 2018 and 2019 earning more than $15,000 a room in profits – historic highs – according to CBRE.

This prepandemic strength coupled with market uncertainty deterred virtually every Canadian hotel owner from bringing assets to market. Only about 80 hotels, out of nearly 8,300 across the country, were sold during the past year, down more than 40 per cent. And just seven of those sales were formal, distressed transactions, Mr. Flood says.

Of the remaining sales, more than half the volume can be attributed to “alternate-use” transactions: Hotels that sold for redevelopment or conversion to social housing totalled about $550-million, a record high. Government agency BC Housing, abetted by Ottawa’s $2.5-billion Rapid Housing Initiative, was by far the most active buyer in the country, picking up 13 hotels for conversion to social housing.

Entering the second quarter, Colliers is tracking “a strong uptick in hotel transactions across the country, both with traditional hotel sales as well as conversions to alternate use.” And while portended sale-price slashes of 40 per cent did not transpire, 10-per-cent to 15-per-cent discounts are expected on sales in 2021.

Story continues below advertisement

Mr. Remtulla says he’d rather have waited to develop a hotel until after the pandemic because permitting processes are taking even longer than usual. Hallmark Hospitality purchased the $22.5-million site, near Broadway and Oak Street, in 2017. Opening date for the Zeidler Architecture design – a 12-storey LEED Gold building with a wood basket-weave exterior, conference rooms and a restaurant – is expected “well after full-industry recovery,” he says.

Four industry forecasts

1. RevPAR will increase by 16 per cent in 2021. As conference business and international travel ramp up, RevPAR will grow 39 per cent in 2022. (Source: CBRE)

2. British Columbia will lead the recovery. Many B.C. tourism operators are dependent on visitors from China, an economy that has bounced back rapidly. (Source: Conference Board of Canada)

3. Transaction volume will exceed $1-billion in 2021. An abundance of capital on the sidelines is propelling positive momentum. (Source: Colliers)

4. The pandemic has been a catalyst for swift, cost-based transformation, resulting in digital automations, more efficient labour modes, new deals with stakeholders and operational efficiencies, many of which will be permanent – a silver lining of the downturn. (Source: Canadian Hotel Market Update Webinar: 365 Days Later)

Your Globe

Build your personal news feed

  1. Follow topics and authors relevant to your reading interests.
  2. Check your Following feed daily, and never miss an article. Access your Following feed from your account menu at the top right corner of every page.

Follow topics related to this article:

View more suggestions in Following Read more about following topics and authors
Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to
Comments are closed

We have closed comments on this story for legal reasons or for abuse. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies