Vancouver’s make‑or‑break moment for future events and tourism

Speed up permits. Provide federal loan guarantees for hotel developers. And find a way to make sure people understand what a new hotel can do for a city or neighbourhood.

Taylor Swift is coming to Vancouver this year. The World Cup of Soccer is rolling into town in 2026. But the city has actually lost hotel rooms.

With major events on the way, and bids for new ones surely to come, a 2023 Vancouver hotel study released by Destination Vancouver says 20,000 new hotel rooms are needed in Metro Vancouver by 2050. Ten thousand of those rooms are needed just in the city of Vancouver, which isn’t exactly brimming with empty development parcels.

It’s doable in theory, but it’s worth noting that Vancouver has actually been losing hotel rooms, not building new ones.

“Our historic peak of hotel rooms was in 2002,” says Gwendal Castellan, manager, sustainable destination development, at Destination Vancouver. “We’ve had a steady loss of rooms since then.”

A Destination Vancouver study last year said the city has lost 1,500 rooms since 2010. The pandemic removed an additional 550 rooms from Vancouver’s hotel inventory.

Building new hotel rooms “is crucial for our global destination competitiveness,” Destination Vancouver president and CEO Royce Chwin offered after the 2023 study was released.

“Lack of available hotel rooms will make visiting Vancouver even more expensive, and the city will be less competitive in attracting major conferences, large sporting events and leisure group travel. Vancouver is running short on time to prepare for the influx of visitors and the economic impact they contribute to the city. Those visitors will just go elsewhere,” he says.

City government executives, tourism board representatives and business people serve on what’s called the Hotel Development Task Force, which is looking at ways that Vancouver can satisfy demand for major events already booked, and continue to lure big conferences, concerts and sporting events to the city and region in the next quarter-century. A new set of recommendations is expected sometime in October.

“The task force is developing priority issues that can expedite the planning, approval and building of new properties, which include but are not limited to zoning and rezoning, height considerations, taxation on highest and best use, air space not to be included during planning and building, recalculating FSR (floor space ratio) for front and back of the house space, compared to residential development,” Ingrid Jarrett, president and CEO of the B.C. Hotel Association and co-chair (with Chwin) of the Hotel Development Task Force, says in an email exchange with STAY Magazine. “Additionally, we’re working to ensure the contribution of accommodations with multi-use and commercial businesses are acknowledged for the value they bring to the community. For example—residential/ accommodation and commercial in one building, and ensuring affordable housing is also included.”

Castellan says short-term rentals are a big issue in the city. They make up roughly 23 per cent of the total supply of hotel rooms in the city, but the province is cracking down on short-term rentals in an effort to find more housing for local residents. If those units become unavailable to the travelling public, it will have a major effect on the city’s ability to host big events, he says.

“Over the past five years, especially during the pandemic, many accommodation properties were purchased by the government and repurposed from hotels or motels into long-term housing,” BCHA’s Jarrett says. “The impact of this, along with the growing economy of travel and tourism has resulted in high demand and not enough supply in the market for Vancouver and several other cities in BC.

“Working together with Destination Vancouver and the City of Vancouver we are looking at what kind of accommodation, where and how many are required to rebalance the accommodation sector with the anticipated growth included.”

Hoteliers say, ‘speed it up!’

It’s great that Vancouver wants more hotel rooms, but Marie-Pier Germain, vice-president sales and marketing at Germain Hotels, says the government needs to take action.

“They don’t seem very keen on providing incentives to help make that happen,” she says. “Something is going to have to give.”

One way to get more hotels to build sooner is through office conversion, something her group has done in the past in Montreal.

“Office conversion to hotel is something we have mastered. It works but only if you have the right floor plate,” Germain tells STAY magazine. “You need windows, for example. The costs of converting a building from office to hotel are about the same as a new build, but it’s much faster.”

Given how office workers in Canada have been slow to return to in-person employment, perhaps shifting a relatively empty office space to hotel would work in Vancouver.

Vancouver’s approval process is particularly slow compared to other cities, says Dev Shamsiek, general manager of the splashy, sophisticated Azur Legacy Collection Hotel in downtown Vancouver. The property opened earlier this year on a site that was home to a long-time Vancouver men’s tailor shop and features beautiful art work and a buzzy rooftop bar.

Azur Legacy Collection Hotel is part of Executive Hotels and Resorts, which also runs the Executive Le Soleil and the Parker Hotel in Vancouver, as well as the Cosmopolitan in Toronto and other hotels.

“We have built in New York. That was a new development project as well, I would say that was in 2017, with our Executive Hotel Le Soleil,” Shamsiek says. “We haven’t had as many challenges (in New York) as we experienced in Vancouver. In midtown Manhattan you would think you’d have a lot of restrictions as well, but it wasn’t as challenging as Vancouver.”