The Hotel Association of Canada looks back at a remarkable year for the hotel industry

RECORD GOVERNMENT INVESTMENT IN TOURISM

After months of consultation with top industry stakeholders including HAC, the government launched the Federal Tourism Growth Strategy. With $158M in new spending, this was the largest investment ever made by the Canadian government in tourism and an important step towards rebuilding the tourism sector. One of HAC’s key recommendations was a business events bid fund to boost Canada’s lagging meetings and conventions business. Delivering on this recommendation, the federal investment included $50 million over three years to launch the International Convention Attraction Fund (ICAF). Administered by Destination Canada, the fund can be accessed by destinations bidding on major international conventions, conferences, and events. Destination Canada estimates this investment could generate $174 million for the Canadian economy, with hotels seeing significant benefits. The government also provided $108M to the Regional Development Agencies over three years to support regional tourism product.

HOUSING

Housing emerged last year for the first time as a key priority for HAC members. Over 62 per cent of members identified access to housing for staff as a barrier to attracting and retaining employees. While the housing crisis is not unique to the hotel sector, the hotel sector can be part of the solution. There are two things we can do: protect the existing housing stock by reining in commercial short-term rentals and creating new stock through mixed-use projects.

REINING IN COMMERCIAL SHORT-TERM RENTALS (STRs)

Commercial short-term rental operators are already illegal in cities like Toronto, Montreal and Vancouver, but enforcement has been weak in most regions. Last fall, the HAC team secured significant action from the Federal Government to crack down on illegal commercial operators, policies that will move tens of thousands of units off platforms like Airbnb and returning them to the rental market. In the Fall Economic Statement, the government announced that those who are non-compliant with municipal regulations will be unable to claim expenses, such as interest and property taxes, against rental income. In addition, a $50 million fund was established over three years to enable regulators to pursue those who are violating local/ provincial laws. The impact of these two policies will be significant, likely resulting in a sizable return of affordable housing stock back to the long-term market—and obviously an increase in occupancy for hotels. As media coverage across the country shows, these announcements are already having a chilling effect on the STR market. The federal measures build on important wins in British Columbia and Manitoba, secured by provincial hotel associations in partnership with HAC. Last year, the BC Government passed some of the toughest regulations in the country, setting a new standard for STR legislation by restricting these rentals to principal residences (excluding rural and resort areas). Other key features of the new legislation include platform data sharing and removal of illegal listings, a provincial registry for hosts, increased fines and a new Enforcement unit. In Manitoba, we assisted the Manitoba Hotel Association in achieving a principal residence requirement in Winnipeg, a first for the province. This win signals progress in the prairies and will help build momentum for further regulations across the region.

SUPPORTING MIXED-USE PROJECTS TO INCREASE HOTEL AND HOUSING SUPPLY

Hotels can be part of the housing solution for all Canadians. Hotels today are building mixed-use facilities (hotels with integrated residential rentals open to all Canadians), but high interest rates, development fees and approvals are limiting many projects from moving forward. Hoteliers are also looking to build affordable staff accommodations and are facing similar barriers for these projects. HAC is advocating to expand existing housing incentive programs to include hotel/ residential rental projects. For example, simply lowering the threshold for the CMHC Mortgage Loan Insurance program from 70 per cent residential floor space down to 50 per cent, would support many more hotel/residential projects. For projects with less than 50 per cent residential floor space, HAC is advocating for proportional access to the program based on percentage. HAC was also pleased to clarify with the Department of Finance that the new GST Rental Rebate would apply to the residential portion of mixed-use projects.

HAC’S WORKFORCE GROWTH STRATEGY

During the first two months of the pandemic, we lost one million tourism workers. This massive hit to our workforce amplified the demographic and reputational challenges already faced by our industry pre-COVID. And while the workforce has evolved post-pandemic, so too has the hotel industry. Hoteliers have made significant efforts to attract and retain workers, including increased pay, enhanced benefits, and adoption of new, flexible ways of working. But with record low unemployment, decreased interest in service jobs, a rise in remote work and a decline in birth rates in Canada, we need to be strategic and aligned to solve this problem. Our workforce challenges need a multi-faceted approach. This is why HAC launched the Workforce Growth Strategy which involves looking at the problem both domestically and internationally.

ATTRACTING DOMESTIC WORKERS THROUGH THE FIRST-EVER HOTEL CAREER MARKETING CAMPAIGN

In 2023, HAC launched its first-ever career marketing campaign. The social media campaign showcased young and diverse hotel employees talking about why they love their jobs. The campaign was a huge success. We reached seven million people with engagement scores that beat every benchmark we had for the campaign. Through social media listening exercises conducted during the campaign, we learned more about hotel workforce conversations online:

• Hotel employee content outperforms employer or recruiter content on social media
• There is a gap online in content and conversation about the great things employers are doing.

We are building on this important work with a new campaign launched this spring.

HAC HOTEL WORKFORCE ACTION PLAN

With COVID relief funding from the Federal Government, HAC commissioned a cutting-edge report by Deloitte’s Future of Work team. HAC’s Hotel Workforce Action Plan reflects extensive industry consultations and the latest in global research. As part of industry consultations, HAC led regional focus groups across Canada for members to discuss and ideate key areas of focus in the report. The action plan set the stage for our strategy by clearly defining and exploring the problem we are facing and what other challenges lie ahead. It highlighted best practices and innovative solutions from Canada and around the world. Through the lens of the talent lifecycle, members leveraged ideas on how their organizations can Attract, Recruit, Develop, Retain and Separate, to meet the needs of today’s employees, while growing culture and your bottom line.

LABOUR SUMMIT: MOBILIZING THE HOTEL INDUSTRY TO CREATE MEANINGFUL, COLLECTIVE CHANGE

To share key research and spark collective change, we hosted HAC’s first-ever Hotel Labour Summit in Ottawa, bringing together more than 50 industry leaders, educational institutions, government officials and settlement agencies for a results-focused strategy session. The “unconference” was a resounding success, with actionable solutions arising from brilliant brainstorming around each table.

INCREASING ACCESS TO INTERNATIONAL WORKERS

While the industry is making strides in growing its domestic workforce, there are simply not enough Canadians to fill the available jobs in the industry, especially in positions that require a high school diploma or less. For these positions, stable access to the pool of international workers is critical. Last year, HAC’s workforce wins unlocked more than 110,000 new positions for hospitality and tourism workers through various immigration channels.

MAKING THE TEMPORARY FOREIGN WORKER (TFW) PROGRAM WORK FOR THE HOTEL INDUSTRY

In addition to critical COVID-specific changes to the TFW program that helped get our industry back on its feet, HAC secured permanent policy changes that will streamline the process for our industry. First, HAC secured a long-time industry ask: a Recognized Employer Program that makes it easier for employers with good track records to hire TFWs. Starting in January 2024, employers will automatically be considered for the pilot when they apply for a Labour Market Impact Assessment (LMIA). HAC successfully advocated for changes to this pilot to make it work better for hotel employers. Originally the program disqualified businesses that did not have at least three positive LMIAs in the last five years. But COVID closures meant many hotels didn’t need TFWs during the pandemic. We were able to change the program to reflect these challenges and employers will now be able to use positive LMIAs dating back to 2016 to qualify.

The government also announced that spouses and dependents of TFWs will be eligible for work permits until the end of 2024, increasing the pool of workers the hotel sector can access. International graduates were also offered extensions on work permits through the Post-Graduate Work Permit program. This will allow our sector to keep workers who have already been trained in their positions for a longer period of time. International Experience Canada was also expanded by 20 per cent. The International Experience Canada program brings almost 90,000 youth to Canada to travel and work. This helps seasonal employers fill gaps with newcomers who are passionate about travel. Canada’s youth mobility agreement with the UK was expanded in 2024. The age limit to participate in the program has been increased from 30 to 35 years old and the work term has been increased from two to three years. The government also removed visa requirements for known travellers from 13 countries (including the Philippines and Morrocco) that can now use an eTA (Electronic Travel Authorization) for entry into Canada. This will make it easier for employers to access TFWs from these countries, as these workers will no longer require a travel visa.