Whatever the competitive landscape, resorts and lodges continue to hold their own as a go-to option for corporate and group events, as well as coveted retreats for tourists seeking a full-service, one-of-a-kind experience.

“The nature of the business is that it has a very strong leisure focus and seasonality,” says , senior managing director at CBRE Hotels in Toronto. But, the sector only accounts for 30,000 of the 400,000 available rooms in Canada. “There are more rooms in Toronto alone than all the resorts in Canada combined,”
he adds.

Occupancy tends to skew lower than the overall average, largely because of the seasonality of the industry. For example, resort occupancy has grown from 54 per cent in 2013 to 59 per cent in 2015, compared to a relatively steady 64-per-cent rate across all segments. Stanford believes occupancy could reach the low 60-per-cent range in 2016. “That’s probably as healthy as it can be.”

On the plus side, visitors are spending more. ADR has increased from $192 to $210 over the past three years, a stronger rate of growth than the overall market, whose ADR increased from $133 to $143 during the same period.
Resorts in Western Canada have shown the most significant growth from both an occupancy and rate standpoint, Stanford notes. “This year, higher-end destinations like Banff and Lake Louise have experienced one of their best years over the past decade.”

The drop in the Canadian dollar has attracted international travellers to the resort-and-lodge sector, as well as Canadian tourists looking to get more value for their dollar. “Because most currencies are tied to the U.S. dollar, it’s opening up a lot of new markets for resorts, including Asia for west-coast properties,” Stanford says.

The 77-suite Nita Lake Lodge in Whistler recently posted its busiest summer on record, with occupancy rates reaching as high as 91 per cent in July, 96 per cent in August and between 80 and 90 per cent from late December through March. Even the shoulder season rates are a respectable 50 to 63 per cent. ADR ranges from $220 to $357 during the winter, and $196 to $270 during the summer.

“We have seen an increase in visitors from the U.S., mainly from Washington State and California,” says Theresa Ginter, GM of the lakeside facility. “It is hard to say what exactly made them choose Nita Lake or why there is an increase, but I would confidently say the strong U.S. dollar and increased awareness through some of the international awards we received this year, along with our consistent TripAdvisor rating are certainly factors. Our biggest market to the lodge remains the Canadian markets, specifically visitors from B.C. that live within a three-hour drive from Whistler.”

Since opening in 2008 it has garnered many accolades, including being ranked the number-1 resort in Canada by Condé Nast Traveler’s Readers’ Choice Awards. Amenities include wellness retreats, on-site yoga, a fitness facility, organic spa, nature trail and three restaurants; as well as a range of water and snow activities from canoeing and kayaking to snowshoeing.

Meanwhile, the growth in mixed-use development, in which consumers own a fraction or entire share of a unit, is a key trend in the resort-and-lodge segment. “Overall, we’re not seeing a lot of resort properties being built. A resort with a decent golf course, spa and amenities would cost $400,000 to $500,000 a room to build. An urban property is less than a third of that. With occupancy rates at 59 per cent this year, it’s impossible to develop a resort, finance it and generate an ROI based on cash flow. That’s why we’re seeing mixed-use development,” says Stanford.

But, while there isn’t a development boom, that doesn’t mean ownership groups aren’t investing in the upkeep of their property. Case in point: since acquiring Huntsville, Ont.’s Deerhurst Resort in 2011, Skyline International has invested in significant upgrades. (Of the 430 rooms, Skyline owns 100, and the balance is owned by a third party as part of a rental program.)

Recently, the Skyline team announced a $500-million mixed-use community and a new Deerhurst Village Centre, which will add 150 hotel rooms, 45,000 sq. ft. of retail and multiple boutique mixed-use buildings. This is in addition to an investment of $10 million to renovate the Deerhurst Resort with significant upgrades earmarked for its Legacy Hall, Compass Lobby Bar, Pavilion guestrooms, Maple Pub and fitness centre, as well as improvements to the lakeside waterfront. A majority of the development is expected to be completed by 2017.

“The village experience is a trend of the future,” says Michael Sneyd, CEO of Skyline International Development Inc. in Toronto. “Destinations like Whistler, Tremblant and Blue Mountain are all doing well on that front. We want to bring that to Deerhurst. The truth is, if you’re not a niche resort, you either have to go big or go out of business.”
The Skyline team is focused on growing market share, adds Sneyd. “There’s a real opportunity to do that now given where the Canadian dollar has gone, because we can promote Muskoka and Deerhurst to the U.S., Europe and around the world.”

Other niche players don’t necessarily have to go big to create an award-winning experience. Susan Wilson, president and partner with Oceanstone Seaside Resort in Indian Harbour near Halifax says the property has garnered a number of industry awards as a destination of choice for weddings, groups and leisure travellers. “It’s not a huge property. We have 12 units ranging from cottages to inn-style rooms. But we make connections with the people who come. By the time guests leave, most of them rebook.” Rates range from $480 a night in the high season for a cottage to $145 for an inn-style room.

The key is executing a turnkey approach to weddings and tailoring services to guests. “Now we’re expanding into focusing on groups, retreats and small corporate meetings, as well as getaways,” she adds.

The hotel operates at about 55-per-cent occupancy for the year with summer and fall being the busiest seasons. “City-centre occupancy rates run around 85 per cent,” Wilson notes. “That’s who we see as our competitors in terms of corporate groups. The difference, however, is we can create turnkey experiences with a high level of service, comfortable beds and a clean environment while guests are surrounded by nature.”

Writteny By: Denise Deveau

Volume 48, Number 1

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