TORONTO – The hotel industry gathered last week at the Sheraton Centre Toronto Hotel for the annual Canadian Hotel Investment Conference (CHIC). It was the first live edition of the event since COVID-19 forced organizers to pivot to a virtual event in 2020.
Following a morning packed with informative sessions, Susie Grynol, president of HAC, kicked off the afternoon’s program with an update on the association’s activities over the last year.
“It’s the calm after the storm,” she opened. “And we’re all feeling it. This is the moment that revenues are coming up, we’re seeing occupancy coming back, we’re seeing provinces have now opened and have put in place aggressive stay-open strategies. We’ve got the border open and it really feels like this might be the turning point for this industry.”
She went on to outline HAC’s focus moving forward, which included the need to “maintain an open travel environment. We can’t go back and forth with the border any longer. We’re okay with regional approaches…Because if that border shuts down again, we’re in exactly the same situation that were last summer.”
She said the narrative around travel also has to change. “It can’t be the ‘travel is the devil’ that we’ve been dealing with this last couple of years, where people can’t put it on their social media because it isn’t socially acceptable. And the government also must set the tone to get us back to business.”
The issue of supply-chain challenges was the next to be tackled in the session titled, Let’s Get It Started: Value Creation Through Capital and Procurement Upheaval. Moderated by Hugo Germain, vice-president, Operations at Germain Hotels, the panel brought together experts Doris Hager, owner and principal of Hager Design International Inc.; Guido Kerpel, Chief Operating Officer at New Castle Hotels & Resorts; and Michael Grubsztajn, vice-president at Jemlor Hospitalité.
The panel addressed how tight cash flow, rising labour cost and challenges to getting materials in on time and on budget is impacting the hotel construction and design sector.
The biggest challenge, they all agreed, was increased cost and turnaround time for materials, leading to projects being delayed and budgets having to be adjusted.
“I’ve been hearing 15 to 30 per cent increases in costs,” said Hager.
Shipping costs are a huge factor, added Hager, with the cost of a container to ship from overseas rising from $3,000 to as high as $30,000 in some cases.
“A good rule of thumb is maybe add an extra $1,000 to FSD budgets allow for the warehouse, or for the shipping issues that you’re having for product [and] allow for extra time for everything,” she said.
The final panel of the day, Canada and the New World Economic Disorder Set Straight, brought together three economists to discuss where the economy is heading, what permanent and temporary changes to the economy are expected, and how we can navigate all the moving parts. Moderated by National Post columnist Sabrina Maddeaxu, experts included Marc Desormeaux, senior economist at Scotiabank; Michael Gregory, Deputy Chief Economist and head of U.S. Economics, managing director, BMO Capital Markets; and Nathan Janzen, senior economist at RBC.
The group provided real-time colour on the significance of all tiers of the government debt, interest rates, and inflation and how the rest of 2002 could unfold.
The day’s closing keynote brought Sébastien Bazin, Chairman and CEO of Accor to the stage for a one-on-one interview with Eric Plesman, head of Global Real Estate, HOOPP (Healthcare of Ontario Pension Plan). The pair covered topics ranging from challenges Bazin encountered personally and professionally during COVID-19 and how he responded to them; his work within Accor to ensure the health and mental well-being of all company employees during the pandemic; and his vision for the future of one of the world’s largest hotel companies.
On March 22, Bazin was in his office, when he got the news that would make the day one of the worst in his career. “That day, I sent WhatsApp emails to all country heads instructing they would need to close all the hotels,” said Bazin, remembering his first thought was for the employees in countries who didn’t have government subsidies in place to help.
“It was even worse [in some countries], because I knew by the end of the [next pay period], they probably [wouldn’t] have access to hospitals.”
It was this thought, said Bazin, that led him top ask Accor’s board to pay 25 per cent of the company’s 270 million euros dividend into a new fund initiative to assist employees during COVID, to provide access to hospital care and food.
“It’s been 25 months and we have given 35 million euros to 145,000 people, mostly in Asia Pacific and South America. So long story short, in the same day I made probably the worst decision of my life, and probably the best one.”
Look for more coverage of the Sébastien Bazin interview in the June issue of Hotelier magazine.