VANCOUVER — From foreign workers to the influx of international investments and more, the Western Canadian Hotel & Resort Investment Conference, held at the Fairmont Waterfront Hotel Vancouver this week, provided plenty of fodder for discussion. Although there were some issues beyond their control, delegates were cautiously optimistic about the state of the industry, fuelled in part by investments from Asia.
This year’s conference attendees were vocal about current issues affecting the sector. A big topic of contention was the changes to Canada’s Temporary Foreign Worker program that came into effect June 1. According to moderator, Dave Kaiser, president and CEO of Edmonton-based Alberta Hotel & Lodging Association, a 2013 PricewaterhouseCoopers survey conducted in Alberta revealed turnover was significantly lower for foreign workers. However, under the new legislation, employers can only apply for a one-year permit. Attendees argued that the program is flawed, as it’s meant to protect jobs for Canadians. While, in reality, Canadians don’t want low-wage jobs such as cleaning toilets.
During the industry round-up, Vancouver-based Carrie Russell, managing director and partner at HVS, and Mark Sparrow, director of hotels for Western Canada, at CBRE in Vancouver, noted that private investors constituted the biggest group of buyers and sellers in 2014, as opposed to last year when hotel investment groups dominated the scene. Tom Andrews, SVP, Hotels for Colliers International in Vancouver, drove that point home, noting that there is a wave of Chinese customers buying into North America. Moreover, many of the top 20 developers in Canada today are directly or indirectly owned by the Chinese government. “We have to pay attention to [Chinese investors], because they’re here to stay,” said Andrews.
Jim Szabo, vice-chairman, CBRE, Vancouver, explained that Chinese investors are diversifying, often basing purchasing decisions on where their children go to school. According to stats from Colliers, these investors are looking for high-profile or trophy property but may also purchase land outside the downtown core. They may buy in Richmond, B.C. for instance, with no urgency to build, “parking capital in dirt,” said Szabo.
Indeed, Chinese investors are making their presence felt in Western Canada. Recent transactions include the purchase of Victoria’s Brentwood Bay Resort & Spa by Chongqing, China-based Forebase International Holdings and Chinese investor Alan Liu’s takeover of Lake Okanagan Resort in Kelowna, B.C. Meanwhile, the Best Western Plus Sands in Vancouver was sold to a Chinese buyer for $31 million.
Overall, the outlook for growth in the West is tempered. HVS’s Russell noted that Manitoba is forecasting a flat RevPAR of $74 for 2014 and 2015, with 667 new rooms expected in Winnipeg this year. In Saskatchewan, occupancy is ranging at around 68 per cent with RevPAR at $102 (2014) and $101 (2015) for Saskatoon, and $95 (2014 and 2015) for Regina. The jewel of the west, Calgary, is expected to have 77-per-cent occupancy and RevPAR of $119 (2014) and $117 (2015).
Moving forward, keeping guests happy continues to be a challenge. “Customers want instant gratification,” noted Aleksa Mrdjenovich, president of Edmonton-based Nova Hotels. “They don’t want to talk to anyone to check-in, order food, et cetera. Essentially, they don’t want nor need to have any points of contact,” she said. And, well many may argue that good consumer service will never die — no matter what technology prevails — one thing is certain, expectations are changing.