VANCOUVER — To build the 10,000 hotel rooms Vancouver urgently needs by 2025 to keep pace with growing demand, a new report released by Destination Vancouver and the BC Hotel Association (BCHA), Hotel Community Impact Assessment, outlines a clear strategy to meet this target while boosting jobs, animating neighbourhoods and unlocking billions in economic activity.
Shifts in the real-estate market, such as declining demand for office and strata developments, have created a rare window of opportunity for hotel development.
“Hotel development needs to be seen as a city-building tool,” says Royce Chwin, president & CEO of Destination Vancouver. “We’re seeing unprecedented interest for investment in new hotel properties in Vancouver. There’s an opening to take swift action, otherwise capital will move where conditions are more favourable.”
Destination Vancouver’s 2023 study on the lack of new hotel capacity demonstrated that without new investment, the lack of hotel supply would translate into significant losses to the provincial economy.
Following the publication of that report, Destination Vancouver and the BCHA formed the Vancouver Hotel Development Task Force to take concrete action on the issue. Made up of representatives from industry and the City of Vancouver, the goal of the Task Force is to identify and recommend strategies to enable a sustainable and appropriate supply of new hotel development.
Hotel Crunch Threatens Growth
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. The lack of new capacity makes it increasingly difficult to attract major conferences and marquee events and meet visitor demand.
Compounding the issue has been a marked decline in hotel supply. Between 2002 and 2022, Vancouver saw a net loss of hotel rooms, largely due to hotel closures and conversions (the pandemic removed 550 rooms from the city’s inventory, with purchases by BC Housing and the City of Vancouver to convert those rooms into supportive housing). Meanwhile, development stalled with just 12 new hotels built in the last 20 years.
“Vancouver has the same number of hotel rooms as we did 2002,” says Chwin. “There are 22 projects currently in the development pipeline, representing approximately 4,200 rooms, which is encouraging. We’re looking forward to the industry moving ahead with these new projects.”
Five Hotel Models to Drive Growth and Inclusion
Five hotel development scenarios tailored to Vancouver’s neighbourhoods and market needs are detailed in the report. Each scenario offers a scalable model to deliver a mix of price points, hotel types and community benefits across the city.
- The Event Space: large, luxury hotels with meeting-and-event spaces
- The Big Brand: large, full-service hotels at an upper mid-market price point located near transit and attractions.
- The Familiar: limited-service, extended-stay hotels in local commercial districts.
- The Basics: modern, budget-friendly options that cater to young people.
- The Urban Resort: high-end, boutique hotels offering unique local experiences.
If the needed 10,000 new hotel rooms are built, the report forecasts 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.
To overcome development barriers, the report outlines recommendations, including deferring development charges; pre-zoning for hotel use in transit-oriented areas; creating solutions for parking and loading; pairing hotels with residential developments; building strategic partnerships to reduce risk and boost demand.
“We’re grateful to Destination Vancouver for their leadership in bringing the industry together and providing clear recommendations through this report,” says Mayor Ken Sim. They’ve been an invaluable partner in the Hotel Development Task Force, collaborating with city staff to shape proposed updates aimed at encouraging new hotel developments and supporting a thriving visitor economy. These updates will be presented to City Council later this month.”
To access the report, click here
