TORONTO — More than 500 hotel-industry executives attended this year’s edition of the Canadian Hotel Investment Conference (CHIC) at Toronto’s Sheraton Centre.
The day kicked off with a plenary session featuring a panel of industry analysts who set the stage by examining how the industry fared in 2018, and what’s expected in 2019 and beyond.
“Last year was a record year for RevPAR,” said Carrie Russell, senior managing partner, HVS, Vancouver, adding the industry has seen 104 straight months of RevPAR growth — higher than the U.S. Though the market continues to do well, Russell did acknowledge “the rate of growth these days is not breathtaking, but more normalized,” pointing out that B.C. and Ontario are about 10-points off this year, while Alberta, Saskatchewan and P.E.I. are all seeing growth.
As always, regional challenges continue to impact both supply and demand. “If you look at the resources market, the oil situation has been [more drawn out] than expected,” said Russell. Still, she pointed out that 1,000 rooms are set to open in Calgary, as well as 650 in Newfoundland.
According to Brian Flood, VP & practice leader, Hospitality Gaming Group, Cushman & Wakefield, “Montreal has really come of age. Performance numbers have risen dramatically and there has been a lot of activity at the airport.”
With regard to hotel cycles, and determining where the industry sits in the current one, the consensus was that the industry can expect more good days ahead. According to Bill Stone, executive vice-president of CBRE, “The economy is doing well and that’s reflected in the hotel business.” There are cycles, he said, but often we look for big global events to [determine how they will impact the industry]. “But the biggest fact is whether supply demand goes up — that has the biggest impact.”
Alam Pirani, executive managing director, Colliers International Hotels, agreed, noting “We’re going through an expansion and growth cycle that is unprecedented. The fundamentals are all positive and, though everyone’s been calling for a recession, we’ve still seeing good growth. There are always cycles but this one is a long one.”
Though investment and development continue to occur in primary and tertiary markets across the country, according to Russell, “People want properties in downtown Vancouver, Toronto and Montreal. There’s a buyer for every market,” she said.
The ongoing proliferation of brands is a topic all panelists feel strongly about. “The importance of branding is clear when you see that one-quarter to one-third of brands in downtown Toronto are Marriott’s,” said Flood.
“Customers are pretty loyal to certain brands,” confirmed Russell, but “they carry all the major cards in their wallet,” she said, adding that they’ll choose one hotel over another based on the kind of trip they’re on. On the development side, “Of the 62 hotels currently under construction, only three are unaffiliated,” she added.
While clearly there are challenges in being an independent these days, “The invention of soft brands is the happy medium,” said Stone. “The younger generation is having an impact there,” he said, adding they’ve fuelled the rise of shared office workspaces, residences and even hotel design, citing as an example, the communal lobby space that is now so pervasive across the industry.
Russell agreed saying the brands have taken notice, but she believes the developers are perhaps slower to respond. “Is it the younger generation, or is it a mindset [that’s fueling change?]” asked Russell, adding, “The younger generation still doesn’t have the money to afford those rates and fill the hotels.”