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Tourism: Coming out of the woods
Ottawa’s tourism sector ‘not out of the woods,’ industry leaders say
BY IREM KOCA
news@obj.ca
The return of events like Bluesfest and in-person Canada Day celebrations triggered a mini-renaissance for Ottawa tourism businesses this summer, but industry leaders caution the local sector isn’t out of the woods yet.
After a devastating two-year stretch in which visits to the city virtually ground to a halt during the pandemic, Ottawa saw the tourism industry slowly come back to life in the summer of 2022.
Thanks to the revival of events like Bluesfest as well as measures such as Ontario’s “staycation” tax credit and Ottawa Tourism’s “third night on us” promotion, those who promote the nation’s capital to outside visitors say they’re beginning to see some light at the end of what’s been a long, dark tunnel.
“Summer has been good for leisure travel, and we’re headed in the right direction,” says Jantine Van Kregten, director of communications for Ottawa Tourism.
For example, the city-funded agency’s “third night on us” deal – which offers travellers a free night’s stay when they book two consecutive nights at participating hotels and runs until Oct. 10 – has been a hit, Van Kregten says.
She says the Ontario government’s staycation tax credit, a $270-million initiative that allows provincial residents to claim up to 20 per cent of their accommodation expenses on trips within the province in 2022, has also helped boost visitor traffic and provided a much-needed shot in the arm to retailers and other tourism-related businesses.
Still, Van Kregten cautions that the industry still has a long road ahead before it’s back at full strength.
For example, while the city’s hotel occupancy rate in July was 42 per cent higher than in 2021 and 130 per cent higher than two years ago, it remained below pre-pandemic levels of 2019, Ottawa Tourism says.
“It would be false to say that we’re out of the woods,” Van Kregten notes.
Ottawa Gatineau Hotel Association president Steve Ball, whose organization represents 65 properties with a total of about 10,000 rooms, agrees.
“Does the fall look strong? No. Was the first quarter a disaster? Yes,” he says flatly.
Ball says there is widespread concern across the industry about the long-term impact to tourism businesses if federal government workers don’t return to the office soon.
Tour groups, conventions and business travellers constitute a significant chunk of tourism-related spending in Ottawa, the veteran industry executive notes.
Yet those groups haven’t resumed pre-pandemic levels of activity to the same extent as leisure travellers, he explains, mainly because the federal government, the largest driver of tourism in the city, still has most of its employees working remotely.
Rising inflation that has driven up costs of everything from gas to eating out in restaurants has also deterred domestic travellers, observers say.
VISITORS TURNED OFF
Meanwhile, international visitors are being turned off by random COVID testing at airports, the much-maligned ArriveCAN app, flight delays and noncompensated cancellations, they argue. According to Ball, Ottawa is particularly “lagging behind” markets like Montreal, Toronto and Vancouver that have more international flights.
Local real estate executive Ashley Hopkins, who is a member of the Byward Market BIA’s board of directors, says economic activity in the bustling downtown entertainment hub is “by no means” back to pre-pandemic levels.
For BIAs, business travellers and conference-goers often provide a midweek boost for retailers, services and restaurants in hot spots like the ByWard Market, and Hopkins says businesses are hoping those groups return sooner rather than later.
Indeed, the pandemic has dealt a massive financial blow to the tourism industry. Pre-pandemic, visitor spending contributed $1.2 billion per year to the local economy. Ottawa Tourism estimates that from the beginning of the pandemic to the end of 2022, the nation’s capital will have lost $3 billion in visitor spending.
Meanwhile, the accumulated debt that tourism businesses have racked up over the past two-plus years is also taking its toll on the industry, insiders say. The trucker convoy protests earlier this year did not help the situation either.
“The early months of 2022 were brutal, with lockdowns and the convoy occupation,” says Van Kregten.
Ball says his organization calculated that at least $18 million worth of hotel bookings were cancelled due to the convoy protests alone.
And even once the industry does start firing on all cylinders, tourism leaders say, another big stumbling block looms – a severe labour shortage.
Ball estimates Ottawa’s hotel industry currently has about 400 vacant positions.
COMMERCIAL REAL ESTATE
Taggart sells Kinaxis HQ to Morguard
BY DAVID SALI
david@obj.ca
Just weeks after officially opening with a headline-grabbing celebration that featured live performances from the likes of Blue Rodeo and Serena Ryder, software giant Kinaxis’s new headquarters has changed hands in a deal valued at more than $60 million.
Ottawa’s Taggart Group of Companies recently sold the 163,000-square-foot office complex at 3199 Palladium Dr. in Kanata to Mississauga-based Morguard for $64.5 million.
Taggart designed and constructed the five-storey building, which is fully leased to Kinaxis. The publicly traded tech firm, which has seen demand for its supplychain management software soar during the pandemic, moved in during the first quarter and christened the new office in style with a private party for more than 1,000 employees and their guests.
Derek Howe, vice-president of development at Taggart Realty Management, said the Taggart Group decided to put the property on the market after a “strategic review” of its assets.
Howe said Taggart typically focuses on developing and leasing retail and residential-class buildings, adding class-A office space like the Kinaxis complex in the Kanata West Business Park is not a “core asset class” for the company.
“This was a bit of an anomaly for us, so it went to market and we were very fortunate to have a wonderful partner in Morguard Corporation that transacted with us,” he told OBJ.
The acquisition adds to Morguard’s growing stable of properties in the National Capital Region.
Cushman & Wakefield associate vicepresident Scott Brooker, who brokered the deal along with the firm’s senior Ottawa vice-president Nathan Smith, said the property attracted “lots of interest from a variety of capital sources.”
Calling the office complex “a showpiece building,” Brooker said the presence of a marquee tenant in Kinaxis plus its close proximity to Highway 417 and retail amenities such as the Tanger Outlets mall made it a relatively easy sell. The Palladium Drive property also includes enough space for another large-scale office should Morguard opt to develop it.
“It’s a brand-new building; it’s best in class,” Brooker said. “So it’s really no surprise that we got the level of interest that we did.”
TCC Canada opens co-working space in Kanata North
BY DAVID SALI
david@obj.ca
An Ottawa-based co-working company that made headlines for taking over a chunk of Shopify’s former downtown headquarters is expanding its footprint with a new location in Kanata.
TCC Canada recently opened a 30,000-square-foot facility on the fifth floor of 1000 Innovation Dr. in the heart of the Kanata North tech park. The new location replaces TCC’s previous Kanata digs, which were located in a smaller space at 555 Legget Dr.
TCC owns and operates five coworking spaces in Ottawa and two in Vancouver. The company made a splash last year when it subleased several floors in Performance Court at 150 Elgin St. from e-commerce giant Shopify after the software firm vacated the downtown office tower following its shift to a remotefirst work model during the pandemic.
TCC president Sean Cochrane said he’s seeing a surge in demand for his company’s services from tenants who’ve scaled back or completely ditched their own real estate footprints but still require meeting and collaboration space from time to time.
“We really seem to be in our age now, because I think what we offer has become more and more prevalent and appealing to pretty much anyone,” he told OBJ.
“Whereas before, we were more in the smaller category with satellite offices and things like that, we’ve got big corporations now looking at us seriously because they don’t have a clue what to do with their space. They’ve either given it up or mandated that everybody work from home.”
TCC signed a 10-year lease at the building, which Montreal-based Mach purchased last year from Cominar REIT as part of a $1.5-billion acquisition of a portion of Cominar’s office and retail properties.
Tenants began moving into the space about a month ago and about 60 per cent of its desks are now leased, Cochrane said. The client list includes heavy corporate hitters such as Dell and Westinghouse, and Cochrane said TCC is in the midst of finalizing a deal to lease up to 85 desks to one of the world’s biggest tech firms.
Meanwhile, TCC is also talking with Mach about taking over another floor in the 150,000-square-foot office complex, which was once home to software firm Entrust.
“We’re seeing a really big spike in activity,” Cochrane said. “It’s a great building (with) great infrastructure. It was very well-purposed for what we were looking for.”
About 40 per cent of the facility is devoted to conference, collaboration and events space. The firm is bringing in guest speakers and live entertainers in a bid to entice workers to leave the comfort of their homes and return to the office – at least some of the time.
“The idea of forcing people into the office is not a good look, and it’s not effective,” Cochrane said. “We need to create reasons to go to the office instead of it being just a place you have to go to.”
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CLV Group Developments transforms Albert Street building into new luxury apartments
Mention the address 473 Albert St. to anyone familiar with Ottawa’s downtown core and they’ll likely know the building: a large, beige, grid-style office tower near Bronson Avenue. At least, it was.
The decades-old building was recently purchased by InterRent REIT and is currently being reimagined as a one-of-akind crafted living space thanks to local developer CLV Group Developments.
In an effort to boost Ottawa’s central apartment supply, CLV Group and InterRent are transforming the traditional office tower into The Slayte, a luxury apartment development that will be home to over 150 elevated rental suites.
“When this dated office building came up for sale, we saw a unique opportunity to repurpose its use by adapting it into much needed housing,” says Brad Cutsey, InterRent REIT’s CEO. “We are very excited about the transformation taking place and the way we will be adding much needed rental supply to the market in a low impact way.”
With help from local consultants including Linebox Studios and Bassi Construction, both the interior and exterior of 473 Albert St. will be reconstructed, with sustainability and adaptive reuse in mind – not an easy task given the building’s previous life as an office building. “It would have been much easier to demolish the building and start over, but we saw the importance in repurposing the building and how much waste is diverted from landfills when reutilizing the structural elements and other infrastructure of the building,” says Oz Drewniak, president of CLV Group Developments.
When completed, the Slayte will feature bright and spacious suites outfitted with modern finishings, providing an array of living options suited to any lifestyle, including beautiful bachelor suites and spacious two-bedroom plus dens. Sleek black fixtures, under-cabinet lighting, quartz countertops, stylish light fixtures and ceramic tiles in the bathrooms are carried throughout the building’s suites, along with Juliette balconies on select suites.
Residents will also have access to central air-conditioning, an in-suite washer dryer as well as six appliances for all their cooking needs. Combining functionality, quality and style, all suites are being designed with what residents are looking for. “We even went back to the drawing board during the pandemic to redesign some suites and amenities in order to create work-at-home spaces to ensure The Slayte would be relevant well into the future,” says Drewniak.
“We wanted to ensure this wasn’t just any other rental apartment building,” he adds.
Inspiring amenities in a top-tier location
Leasing a suite at The Slayte opens the door to a carefree style of living where everything you need is at your fingertips – both inside and outside of the building.
Inside, The Slayte is fully equipped with a stunning twostorey lobby, a state-of-the art fitness center – including a yoga studio – a large business center with flexible workspace options, underground parking and a smart hi-tech mailroom.
The building also includes a Sky lounge, equipped with a kitchen, theater area, games and floor-toceiling sliding windows creating an indoor-outdoor oasis.
Outside, on the rooftop terrace, the building boasts panoramic views of the city along with a hot tub, BBQs, seating areas and fire pits for residents to enjoy.
The development’s central location is also a key selling feature.
“The downtown core is rapidly evolving from what used to be predominantly office buildings, into a more mixed-use environment where residential uses are playing an important role in the vitality of the area,” says Drewniak.
Located just steps away from the LRT Lyon station, The Slayte – which is also a pet-friendly building – connects its residents with not only the downtown core, but with some of the greatest neighbourhoods in the city, along with green spaces, vibrant shops, bike paths, restaurants and cafés.
With the building expecting to welcome residents this September, there’s no better time to think about what downtown living could mean for you.
To find out more about The Slayte, visit theslayte.com.
