Canada's Hotel Industry Seems to Rebound in August

Mon, 13 Sep 2021 01:07:15 -0500

With the pandemic waning, most of Canada’s provinces have reopened using a step-by-step approach. For the country’s hospitality industry, this means more people, tourism, and revenue.

Last year, the hospitality industry was one of the hardest-hit sectors due to the pandemic. The hotel occupancy rates plummeted to an all-time low in April 2020, with 81.2% of the hotels being vacant. Now, the industry is already seeing a gradual recovery, with Toronto hotels having a 43% occupancy rate in July.

Adding to it, the Canadian government has introduced new measures which allow more tourists into the country. With these guidelines, more international tourists are willing to visit Canada for business and leisure. What does this mean for the Canadian hospitality industry? Read on to find out.

What was expected?

The sudden travel ban due to Covid-19 forced hotels to shut down or work on a low revenue. As the sector hit rock bottom, many industrialists were hoping to drive occupancy in the coming years. A study by HVS predicted a 15% rise in the market value of the Canadian hotel industry in the year 2021.

Hotels attempted to reduce losses by offering rooms and services at a discounted price. Yet, due to the Covid crisis, not many preferred traveling or staying at hotels. But, as predicted, 2021 has been a promising year for the hospitality industry.

According to CBRE, a commercial real estate company, hotel occupancies across major Canadian cities will range from 31% to 37% this year. Though these rates are far from pre-pandemic times, they are showing a gradual increase when compared to the rates in 2020.

What boosts the recovery?

With the vaccination rates increasing all over the world, more people are open to international traveling. Several countries, including Canada, have eased the guidelines and allowed international tourists to enter the country. From a surge in leisure tourism to essential business travel, many factors are boosting the hospitality industry in Canada.

Reopening of provinces

The country is gradually reopening provinces using a methodological approach. Some states are in the last stage of reopening, while others, like Ontario, are in the second or third stage.

Residents are seeing it as an opportunity to travel within the country. Boosting the revenue of the hospitality industry. A report by CBRE states that domestic travel is the key to driving hotel occupancy, with a 75% to 80% share in the total tourism revenue of Canada.

Provinces like Ottawa are coming up with programs to boost tourism. Hotels in the province are offering packages at discounted rates, especially for advance bookings.

International tourism

Canada welcomed the U.S. citizens and permanent residents back into the country starting August 9th. Lifting a 17-month travel ban across borders, the country mandated all travelers to be fully vaccinated.

Later, on Sept 7th, the Canadian government introduced new guidelines for international visitors from other countries. The measures make it easy for tourists, both essential and non-essential, to travel to Canada. Out of the several guidelines, visitors are required to produce a Covid-19 molecular test report and also be asymptomatic.

As international travel reopens, the industry counts on “revenge travel” by tourists who couldn’t travel during the pandemic. Even otherwise, the country can expect a surge in the hotel industry revenue due to non-essential travel.

Essential business travel

Business travelers from across the world want to travel again to boost their business. Many believe that their business will suffer without traveling. A survey by SAP Concur reveals that 96% of the participants are willing to travel for their business in the next 12 months. Among them, 36% want to stay in hotels on their next business trip.

What does the industry want?

Even though hotel occupancy rates are gradually rising, the hospitality industry is facing new problems. Several hotels are unable to return to the pre-pandemic condition due to the following reasons.

Labor availability

As the industry revenue plummeted, many hotels laid off employees due to the lack of business. Now, as the business recovers, hotels are finding it difficult to rehire staff. Very few have returned to their previous company and many have joined other businesses during the pandemic.

Vaccine Passport

The hospitality community is also pressing for a vaccine passport to keep its employees safe. Hotels will treat such passports as proof of vaccination, and allow customers to enter restaurants, lodges, and other buildings.

As the hospitality industry requires close interaction between people, a vaccination passport is essential to maintain the health of all its employees. As Tony Elenis, president of ORHMA, told CBC, vaccine passports are one of the most efficient ways to protect the industry from another lockdown in the face of the delta variant.

What can we look forward to?

Many industrialists believe that the hospitality industry will see a full recovery in the coming years. The HVS Hotel Industry Outlook report predicts a return to normalcy by the year 2024.

Even though tourism is increasing hotel occupancy, considerable revenue only comes from large bookings such as meetings and conventions. Currently, hotels are receiving fewer bookings from smaller groups for events and meetings. But larger conventions are generally booked in advance, hence, hotels are looking towards 2022 or even 2023 for considerable business.

Additionally, hotels are also relying on the increase in vaccination rates to boost their revenue. As Canadian guidelines require tourists to be fully vaccinated, increasing vaccination rates are making more people open to international travel.

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YMCA of Greater Toronto Sells Mississauga Site for $90 Million

Mon, 08 Feb 2021 09:51:24 -0500

In a surprising move, Greater Toronto’s YMCA has sold its location in Mississauga, Ontario to a local company. The report from CoStar explains that the plan is a multiphase project spanning various towers.

The site interviewed the buying company’s president, who confirmed that the deal closed on the 5th of December. The $90 million number comes from property records. However, HBNG is still to release an official statement.

While the YMCA hasn’t commented on the topic, it appears there’s a lease negotiation for the organization to maintain operations. The site plans have several phases, but mixed-use towers with floor retail are among the initial expectations.

The Decision Behind the Sale

The Real Estate News Exchange has a more detailed article about the sale. It goes through the comments of John A. D’Angelo, both president of RGF and HBNG’s CEO. He states that the YMCA sat on a considerable asset, so they probably considered it was better to invest that value for more important tasks.

The YMCA’s goal, according to the report, was maximizing upfront proceeds from cash sales. It resulted in a request for proposals. RGF obtained exclusive rights for the property’s negotiation.

The mixed-use development for the site offers plenty of opportunities. Permitted developments for the property include many high-density projects. It means that residential, office and retail infrastructures are viable.

The Property Itself

The facilities include a gym, fitness studio, childcare service, and a swimming pool. However, the YMCA negotiated a leaseback to keep its operations. That’s why RGF has offered space for the organization if asked.

The site enjoys an excellent location as well. People can walk from it to retail centers, schools, offices, and other facilities. Both Celebration Square and the Square One center are in the area.

Condominium development in the surrounding neighborhood has also been increasing, driving demand for residential space. There’s also the light rail transit line construction that recently started development.

HBNG Holborn Group: Leading RGF Developments

HBNG is an integrated development firm involved with several real estate operations in the area. RGF is a partnership between high net-worth individuals and large Canadian pension funds.

The main goal for the group is to tackle every opportunity for growth in the market. That means investing in projects that can benefit a city’s growth or change life quality. However, not all deals benefit that vision, so they focus on the most relevant projects for their vision.

According to the article, the companies belonging to HBNG include Kapp Infrastructure, Poetry Living, and Soho Innovation Lab.

The Company's Portfolio

Finally, the company invests in different types of properties without concentrating on specific areas. For instance, RGF is partnering with Mattamy Homes to create around 700 homes. The official builder is Poetry Living.

On the other hand, we have the Soho Center. It spans 35,000 sq ft for retail and office space as well as parking. HBNG also developed a Walmart in Collingwood, and RGF led purchasing The Country Club. This golf course will see the Country Club Village’s development.

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