Vancouver’s elected leaders are set to consider what one councillor describes as a longstanding “hotel supply gap” that, if unaddressed, could result in tens of billions of dollars in foregone revenue by 2050.
The motion by Coun. Sarah Kirby-Yung states that without new rooms, the lack of hotel supply in Metro Vancouver could also mean more than 168,000 full-time equivalent jobs never come to fruition in the next 27 years.
“Vancouver’s continued loss of hotel rooms was identified by the tourism sector prior to the pandemic and is due to development policies that provided geographic and zoning restrictions,” the motion states.
“The high cost of land is also resulting in alternate use of sites including conversion to residential housing, and the high costs of operating properties are also a barrier.”
The proposal is to have municipal staff report back by the end of the first quarter of 2024 on opportunities to build and expand upon the hotel industry in the city. That could mean rezoning and finding ways to expediate hotel proposals that have already been submitted.
Vancouver’s hospitality industry has been beset by challenges before, during and after the COVID-19 pandemic.
Since 2010, the city has lost some 1,500 hotel rooms, according to the motion. Another 550 were lost during the pandemic, purchased by BC Housing and the municipality, and converted into supportive housing.
Short-term rentals, such as Airbnb, have met some increased tourism demand, but the redirection towards these rentals as a result of a hotel room shortage “can put pressure on the local housing stock,” it adds.
“We know there’s additional pressure on housing. You’re going to see us be really strong on housing this fall,” Kirby-Yung told Global News. “So by building new hotels, we can alleviate some of that pressure … we want obviously, homes to be homes first and foremost for locals.”
In March, Destination Vancouver estimated that 20,000 new hotel rooms would be needed in the region by 2050, at least 10,000 of which must be built in Vancouver, lest the sector, affiliated industries and all levels of government lose out on billions in potential visitor spending.
“I often say that the visitor economy is an unsung hero. In the Vancouver region alone, it’s 57,000 jobs and $8.5 billion in direct spending,” said Kirby-Yung.
The motion states that bureaucratic red tape, including lengthy approval processes, has hampered developers’ ability to get new hotels approved and built in the city. Many recently-built hotels, it adds, are classified as mixed-use residential.
Ingrid Jarrett, president of the B.C. Hotel Association, said many municipalities have “rightfully” prioritized housing, but the hotel room shortage is now “limiting Vancouver’s position on the global stage.”
“We have this incredible conference centre, we have marvelous hotels, but without additional hotel rooms, we will not be able to maximize the capacity at our event spaces or even for corporate meetings and conferences, and international travel,” she said.
“Vancouver is the gateway to British Columbia. This pressure on the Vancouver hotel community ripple-effects throughout the province.”
Jarrett said Vancouver is not only in need of luxury hotels, but hotels that meet all budget ranges “in order to meaningfully contribute to well-being and the whole community plan.” Kirby-Yung agreed, having heard complaints that it’s tough to find an “affordable” hotel room in the city.
If the motion is approved, municipal staff are expected to consult partners including Destination Vancouver, the B.C. Hotel Association, the Vancouver Hotel Destination Association and others on policy solutions.
Staff would also consider expansions of the city’s interim hotel policy, building on directions for hotel use in the Granville Entertainment District and Broadway area in particular, as well as consider rezoning in the downtown core. They would come up with new targets for hotel delivery, and develop a tracking system to monitor progress on closing the 10,000-room gap as well.
The motion is set to go before council on Sept. 13.
— with files from Kristen Robinson
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