Vancouver desperately needs 10,000 more hotel rooms but development is being held up, says a new report.
Just 12 new hotels have been built in the city over the last 20 years, and Vancouver has the same number of hotel rooms as it did in 2002, according to a Wednesday report from Destination Vancouver and the BC Hotel Association.
“Vancouver hotels are operating at near full capacity, with 80 per cent average annual occupancy and up to 95 per cent during peak seasons, well above rates in peer cities,” said a statement from the organizations.
“The lack of new capacity makes it increasingly difficult to attract major conferences and marquee events, and meet visitor demand.”
In fact, hotel supply has actually declined, the report found. Vancouver saw a net loss of hotel rooms between 2002 and 2022, largely due to hotel closures and conversions, although 4,200 rooms are now in the pipeline.
The groups said 10,000 new hotel rooms are needed in Vancouver by 2050, representing a 70-per-cent increase from today’s inventory.
If this target is met, the report said it would result in 5,450 direct local hospitality jobs; up to 8,000 indirect jobs in retail, events and services; $125 million in annual municipal tax revenue; and $78 million in provincial tax revenue.
The report offers recommendations to overcome development barriers, including deferring development charges, pre-zoning for hotel use in transit-oriented areas and pairing hotels with residential developments.
The drive to have additional hotel rooms in the city comes because Vancouver tends to have the most occupied and priciest hotels in the country.
CoStar data shows Vancouver hotels were on average 71.5-per-cent occupied in February, with a $216.16 average daily room rate. That compares with Toronto's 68.4-per-cent average hotel occupancy and $213.96 average daily room rate during the month.
Late last month, Vancouver's Reliance Properties and Montreal's Germain Hotels launched the city’s latest hotel proposal – one that would see a 12-storey office building at 1111 West Hastings Street get converted into a 180-room boutique hotel.
The site is zoned to allow hotel use as well as office, so no rezoning is needed.
"It would be just [needing] a minor development permit, just for any outside related work, and a building permit," said Reliance Properties CEO Jon Stovell. "It's very fast."
Destination Vancouver CEO Royce Chwin told BIV at the time that the project goes a long way towards addressing the city's hotel shortage.
–With files from Glen Korstrom
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