'Dramatic turnaround’ taking place for Canadian Hotels: Don Cleary

I sat down with Cleary at the Ritz Carlton hotel in downtown Toronto to talk about everything from the travel rebound to hotel renovations and labour shortages. We’re not back to early 2019 times just yet, but he says there’s progress being made.

“We’re beginning to see some encouraging signs,” Cleary said. “We are not out of the woods at all, but the last three to four weeks have been a dramatic turnaround. It’s like a light switch was turned on.”

Cleary said he thinks the surge is tied to the lifting of restrictions and the end to testing at the Canadian border.

“I don’t think it’s a surprise to anyone that those were the factors that were holding back our industry.”

Cleary said Marriott Canada’s numbers right now are “more than double” what they were in January.

“City hotels are picking up a bit,” he said. “There was some leisure travel during the pandemic,” he said, and places such as the Okanagan Valley in B.C. did well with Canadians taking so-called staycations.

“Urban areas were particularly hard-hit, but we’re beginning to see some return to those markets. We’re nowhere near pre-pandemic levels, but our group bookings are looking pretty good for small and medium-size corporate groups.

“There’s a lot of pent-up demand for that. So that’s coming back. Our booking pace for the second half of this year and future years looks pretty good. We’re very encouraged there. The big, large conventions aren’t back yet, and we need to get those back. Until they come back the cities won’t get back to pre-pandemic levels.”

Cleary said “road warriors” also are making a return to hotels.

“The business transient, what we view as the road warriors, they’re beginning to come back. They’ve been the slowest to come back, and are still down considerably versus pre-pandemic levels. But, really, just in the last month we’re beginning to see some encouraging signs.”

Cleary said Marriott sees considerably more of its Bonvoy loyalty program members on the road again. He also said weekday night hotel stays are picking up again.

“Historically, Tuesday and Wednesday were peak occupancy nights pre-pandemic. Those have been our worst nights during the pandemic. Weekends were strongest. But we’re beginning to see weekday numbers equal the weekend.”

Cleary said he’s confident the Canadian hotel business will be back to normal at some point.

“People love to travel,” he said. “People love to get together and meet. Yes, the technology of Zoom and Teams calls helped us through this, but people want face-to-face interaction, and I think we’ll get back.”

Experts have been saying a full recovery isn’t expected in Canada until 2024. But there’s now some optimism that things could be back to “normal” by the end of next year, Cleary said.

“I think we’re a little behind the U.S. The U.S. may get back to pre-pandemic levels by the end of this year or early next year.

How fast Canada rebounds “is really dependent on the virus, that we don’t have significant spikes, and, more important, that we learn to live with it when there are spikes. And not go back into shutdowns or closing the border,” he said. “It wasn’t the virus that hurt our business, it was the reactions that had to be taken that the science might tell us we didn’t have to do in such dramatic [ways] that impacted the travel industry.”

Cleary said the most important thing to him is that customers are confident that it’s safe to get back to their former travel habits. And Marriott is working to make sure that happens.

“We had a learning lab just last week in Toronto and brought all our big group meeting planners to the Westin Harbour Castle Hotel to demonstrate how we can execute large and medium-sized group meetings; the safety and cleanliness protocols that we have in place, the way we can be flexible and accommodate what they want.

“If they want all their attendees to be tested, we showed them how we would go about doing that. We showed them how we can set up meeting rooms and provide food and beverage in a way that gave them great confidence that you can execute in-person meetings or hybrid meetings. We showed them the technology to conduct hybrid meetings. I think the feedback was great.”

Cleary said he’s on the board of the Tourism Industry Association of Canada and the Travel and Tourism Roundtable, both of which lobbied to get Canada’s tourism industry working again. He said Marriott also is working with destination marketing organizations “to show what a huge economic driver tourism really is.”

With so many people deprived of their favourite travel experiences, luxury hotels have been doing well.

“The industry has called it revenge travel,” Cleary laughed. “Luxury is doing extremely well. That’s especially true in our warm weather resorts in the US. Last year and this year I think are the strongest years they’ve ever had. In Canada, there’s not as many warm weather resorts but you do have places like this, the St. Regis, the W in Montreal. Those hotels, they’re urban, but they’ve enjoyed some staycations.

“I think people have discovered how nice those type of weekends can be in urban environments, and I think that might be a business that’s here to stay.”

Marriott is, of course, a major player on the Canadian hotel scene. There are nearly 270 Marriott properties across the country.

“We have a majority of upper-upscale full-service hotels in Canada,” he said, including St. Regis, Sheraton, Ritz Carlton, Westin, Marriott and Renaissance. Canada’s Delta hotels are now part of Marriott, as well.

Cleary said Marriott is growing in existing markets “and growing in what I’d call secondary tertiary markets with some of our mid-scale hotels, such as Fairfield and Towne Place Suites. The last few years we realized we could grow those more aggressively.”

Marriott also is opening urban hotels, including posh Marriott Autograph Collection properties. The Pearle Hotel and Spa on the Burlington waterfront in Ontario opened last year (and it’s gorgeous). The Muir Hotel opened in Halifax earlier this year.

“The Muir, in my opinion, maybe the finest hotel in the entire Maritimes,” he said.

Another Marriott Autograph property is the Humaniti hotel in Montreal. The Dorian will be another Autograph Collection hotel when it opens in Calgary this summer. Cleary said it will have a “spectacular” rooftop restaurant.

The former Marriott on Bloor Street in Toronto, just east of Yonge, has been totally renovated and should open as the city’s first W Hotel by late spring or so, complete with a rooftop bar. Marriott also has plans to open its first youth-oriented Moxy hotels in the third quarter of this year, one in Halifax and the other in Banff.

There are now more than 100 Delta Hotels around the world, with more to come, including a Delta in Markham, Ontario later this year.

On top of that, there are tons of renovations happening across the Marriott portfolio in Canada. Sheraton hotels around the world have been given or are getting new looks, including the Sheraton Gateway at Toronto Pearson (stunning) and the popular Sheraton Centre on Queen Street West in downtown Toronto, which should be finished soon and will feature a new lobby and a luxurious, new club lounge. Other Sheratons being renovated include the Sheraton Fallsview in Niagara Falls, Le Centre Sheraton in Montreal and the Sheraton in Laval, Quebec.

Cleary said he wouldn’t describe the Sheraton changes as upgrades.

“I don’t think we took it up a tier. I think what we did is focus on its core strengths. For instance, it’s always been THE gathering place in the cities it’s been in for generations. So, we have a big focus on the lobbies, you’ll notice. We want this to be the gathering place for customers and the community We wanted to do a very nice, efficient room product.”

One major issue facing hotels in Canada, and many other parts of the world, is the shortage of skilled labour.

“It’s definitely a real problem,” Cleary said. “We’re doing okay through it but it’s a challenge. Marriott has a long history of both retaining and developing talent. We’re out there trying to tell our story, that you can still have a great career in hospitality with us. And we’re working closely with government for help.”

Cleary said changes to the foreign worker program, announced recently by the Trudeau government in Ottawa, will make it much easier for a hotel to hire workers from outside the country.

“They will help through the busy summer season,” he said. “We’re probably okay for the rest of the year, but we need workers in summer.”

He’s also hoping to tap the federal government’s program that will allow Ukrainians to work in Canada for up to three years.

“Luxury is popular, and prices are up,” Cleary explained. “People come to hotels with the expectation of a certain level of service, so we want to make sure we deliver it.”

Cleary said he thinks many of the technology changes made in hotels during the pandemic are here to stay, including remote check-in.

“In many ways, we were moving in that direction before COVID. COVID expedited a lot of it, especially customers’ adoption of technology we already had,” he said. “We’ve upgraded the Marriott Bonvoy app to enhance stay and things around your stay. There’s a lot of investment in that.”