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LodgingNews March 2017 | Vol. 14 | No. 2

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HAC: The Future of Brands

From left: Phil Cordell, David Larone, Heather Balsley, David Tarr and Don Cleary. By Colleen Isherwood, Editor

Canada Post Publications Mail Agreement No. 40010152

TORONTO — An all-star lineup of brand leaders faced off as the grand finale for the Hotel Association of Canada’s 25th conference, saying that brands are changing but are here to stay. Moderator David Larone of CBRE characterized 2016 as “a series of crazy takeovers,” and asked leaders of five major brands what they thought about the motivation for brand consolidation. Don Cleary, president of Marriott in Canada, said his company saw the acquisition of Starwood as “a once in a generation opportu-

nity. We felt it was a good price. Another big factor was the competitiveness of our industry groups in distribution now. Size and scale matter and help us to be competitive.” Marriott has added five chains over the previous eight years, including Gaylord Hotels, which provided access to the convention and entertainment multiplex sector, which Marriott did not have. Delta provided access to cities in Canada that Marriott did not cover. “We’ve got some digesting to do,” Cleary told the conference. “But I wouldn’t rule out another geographic move in another part of the world.” Similarly, Heather Balsley, SVP, Americas

brands and marketing for IHG, said their acquisition of Kimpton filled gaps in IHG’s brand portfolio, since Kimpton had a strong position in the boutique space. She noted that Kimpton could also benefit from IHG’s distribution network. “It’s all about scale,” said Phil Cordell, global head, Focused Service Brands, for Hilton. “It’s part of ensuring support of our customers across a broad spectrum of brands.” David Tarr, SVP, real estate and development for Hyatt, noted that at one tenth the size of the other hotel groups, with 650 hotels,

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LUXURIOUS LAIR BRINGING CLASS AND STYLE TO BATHROOMS

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HOTELS AND MOTELS ARE OVER-ASSESSED

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NAVIGATING CHINESE HOTEL DEALS IN CANADA

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REAL ESTATE CLN’S LONGAWAITED REAL ESTATE SECTION

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EDITORIAL

2017: The year of home sharing regs

By Dr. Chris Gibbs (left) and Dr. Daniel Guttentag Dr. Chris Gibbs and Dr. Daniel Guttentag are assistant professors in Ryerson University’s Ted Rogers School of Hospitality and Tourism Management. Both of them are currently focused on research about Airbnb. Contact: cgibbs@ryerson.ca; dguttent@ryerson.ca Over the past few years, home sharing platforms like Airbnb, VRBO, HomeAway, and Flipkey have experienced explosive growth. For example, according to a recent presentation by Airbnb’s head of global policy and public affairs, Chris Lehane, Airbnb has benefitted from 111 per cent year-over-year growth in Canada. The driving force behind this growth has been a network effect with 70 per cent of guests learning about the service from friends and family. From a hotel perspective, Airbnb accom-

modations represent 2-5 per cent of the overall lodging market in major Canadian cities like Toronto, Vancouver, Calgary and Ottawa. The emergence of Airbnb has occurred at a time when the Canadian hotel industry has been experiencing revenue growth, with a 5 per cent increase in revenue per available room from 2015 to 2016. The impact of Airbnb on the hotel business is difficult to measure due to the countless factors that affect hotel performance, and different reports have reached varying conclusions. Airbnb-sponsored reports suggest there is only a marginal impact on hotels, whereas lodging industry-sponsored reports suggest the opposite. Indeed, Tony Elenis, the chair of the Hotel Association of Canada’s Airbnb Committee and the president and CEO of the Ontario Restaurant Hotel & Motel Association, warns that “a downward economy could significantly increase the impact of Airbnb on hotel performance, which would further reduce hotel revenues and lead to job reductions.” In many Canadian cities, local city councils have either recently approved or are in the process of considering regulations and/or taxes on sharing economy platforms like Airbnb. The discussions are being driven by a variety of concerns, including the prevalence of

multi-unit operators on the Airbnb platform, Airbnb’s potential impact on local housing markets, and Airbnb’s failure to collect and remit taxes in many jurisdictions. However, while some hotel owners are hoping regulations will slow Airbnb’s growth and reduce its impact, most existing regulations have proven ineffective and difficult to enforce. For example, in April 2016 Quebec became the first Canadian province to regulate home sharing, yet after four months, fewer than 500 permits had been issued to the more than 10,000 units listed in the province. According to the Quebec Hotel Association, the laws lack teeth and prosecutions take too long. Nonetheless, stricter policies taking shape in cities like San Francisco and London may set a precedent for more stringent regulations in some Canadian cities as well. The debate and regulation of home sharing will be in the public eye across Canadian cities this year. New regulations may slow supply marginally, but probably will not eliminate the threat posed by this new disruptive form of competition for hotels. Hotel owners and managers are well advised to monitor both local and national developments and react quickly to the rapid changes affecting the industry.

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EDITORIAL ADVISORY BOARD JASON CHESKES Above The Line Solutions

SPOTLIGHT

Hotels and motels are over-assessed By Jim Baker Jim Baker is the past CEO of the Manitoba Hotel Association, as well as a former partner in the accounting firm of Palmer Badger Baker. In his retirement, he has taken on assignments that allow him to apply his decades of experience in accounting and hospitality. Baker led a battle, up to the Supreme Court of Canada, with the City of Winnipeg and its Realty Assessment Department. The favourable outcome resolved some of the subjectivity leading to wide swings (upward) in values, and produced an assessment manual, which gave some transparency and consistency to assessment. Contact: Jim Baker, CPA, CA, jhbaker@shaw.ca Assessment and valuation is an art, not a science. As it relates to hotels and motels, valuation is an ever-evolving school of study that must change with, and recognize, the specific needs, conditions and unique circumstances faced by the industry’s owners and operators. Hotels in particular are a specialized form of assessment. An assessor must have a thorough understanding of the ever-changing hospitality industry and the accounting skills to comprehend the difference between normal commercial assessment and the unique assessment of hotels and other accommodation properties. There is a growing concern that hotels in Canada are potentially over-assessed because assessors are using outdated methodologies and inconsistent industry averages. These

4 | Canadian Lodging News

methodologies may neglect the unusual characteristics, and technological changes, of the industry. Assessors have a tendency to subjectively stabilize net operating income to meet their objectives, with little or no rationale or explanation for the subjective stabilizing adjustments. Further to these concerns, there are distortions on assessments by hotels whose income is primarily from video lottery terminals (VLTs) and beer vendors. Assessors have to recognize the uncertainty of revenue generated by vendors and VLT income, and this should be recognized with a higher capitalization rate to capture the associated risk. Due to this growing concern, I have dedicated my attention in my semi-retirement to fighting for hotel and motel owners and operators, as I have done throughout my career. Assessors must apply appropriate valuation methods that capture the changing face of our industry. I have been sponsored by Fairtax Realty Advocates Inc., one of Canada’s leading property tax agencies, to ensure hotel and motel assessments remain fair and equitable. Fairtax works solely on contingency, so their clients don’t receive a bill until their assessments are successfully appealed. Of particular interest to me, and to you, the operator, is the accounting and assessment treatment of OTA costs. There can be a substantial adverse effect in how your assessment reflects this significant item in your financial statements. The simple fact is that hoteliers must contend with a business model that is simultane-

ously retail-focused and managerially intense. With the rise of Online Travel Agents, and necessary adjustments to marketing and promotions budgets, assessors must become experts on our industry. In my opinion, this has not been the case thus far. It is our responsibility to ensure that our assessments are defendable, tenable and reflect the true market value of our enterprises. To date, we have been successful in employing our methodology while appealing over-assessed hotels and motels. We would be happy to speak with you to ensure your assessment is appropriate. In 2017, I plan on travelling Western Canada, holding information seminars for interested members of our industry. In the meantime, if you would like to discuss the issues played out in this article, I would be more than happy to guide you through the changing world of hotel assessment and valuation. On behalf of Fairtax, I will be part of a group doing presentations to operators, franchised groups and brands and look forward to renewing the many friendships I have enjoyed serving on the national board of directors of HAC, and from attending hotel conferences across Canada. If you’d like more information about our next stop in your market, or if you have a question regarding the most current assessment of your property, please feel free to send an email to jarrett@fairtaxrealty.ca. We’d be happy to provide a complimentary review of your assessment and determine if there is any merit in an appeal.

VITO CURALLI Hilton Worldwide PHILIPPE GADBOIS Atlific Hotels & Resorts MARK HOPE Coast Hotels BRIAN LEON Choice Hotels Canada Inc. ROBIN MCLUSKIE Colliers International Hotels BRIAN STANFORD CBRE DR. DAVID MARTIN Ted Rogers School of Hospitality CHRISTINE PELLA Serta Mattress Company ANDREW CHLEBUS LG Electronics

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Toronto seeks to tax the family vacation

Austrian hotel back to using keys

tion like no other in Canada. Nobody else has a competitive set right next door with a 4 per cent difference in tax,” Mundell said. “For people who don’t think that 4 per cent makes a difference, they’re wrong. Four per cent makes a huge difference when bidding conventions. “And for investors, the best spot to build new hotels is outside the city of Toronto.”

Airbnb still wouldn’t pay fair share

Terry Mundell TORONTO — The City of Toronto’s vote to implement a 4 per cent tax on hotel rooms would amount to a tax on the family vacation and small business, said Terry Mundell, president and CEO of the Greater Toronto Hotel Association (GTHA). And what’s more — only the province can change the City of Toronto Act to give the city the authority to implement such a tax. Mundell spoke emphatically and passionately in an interview with CLN about the effects the tax would have on hotels in the City of Toronto. “Our association has been aggressive on this issue,” he told CLN. “The City of Toronto does not have the authority to implement a hotel lodging tax under current legislation. We have fought for this section in the last couple of reviews,” he said. “City council voted in favour of a 4 per cent tax on hotel rooms. We don’t know if HST will be included, but we know the revenue will be used for city operations.”

Under the city hall resolution, Airbnb-type accommodations won’t pay HST, but would be subject to a 10 per cent hotel tax. “At minimum, they should be up to the HST level. On the OTAs, if you book a hotel room, there’s an HST component,” but for Airbnbtype accommodations there’s none. Mundell added that Airbnb has a significant presence in Toronto, with more than 10,000 rooms, the equivalent of a 350-room hotel — the size of the Toronto Park Hyatt — operating at 75 per cent occupancy.

BRIEFS

Tony Elenis

ism Toronto — and it got to the point where Tourism Toronto didn’t have the funding needed to promote the city. At that point, the DMF was created. “Now they want to add another room Relationship with existing DMF tax which puts the DMF in jeopardy,” Elenis While the tax passed by city council would told CLN. “The City of Toronto is nowhere go directly to city operations, the existing vol- near New York or Boston when it comes to untary Destination Marketing Fund (DMF), revenue. There’s a big difference in the comconsisting of up to 3 per cent of hotel room rev- petitive set when it comes to fighting for conenue, goes entirely towards marketing the city ventions, etc. and attracting conventions. “The city of New York’s average rate is “Retail, restaurants and attractions all ben- more than $300 more [per night] than Toefit from the DMF. The tax would hurt their ronto’s. Among our competitive set, we’re businesses as well.” the second lowest. I don’t see that there’s any Mundell pointed out that the DMF would room for Toronto to add another tax.” probably die, because hotels can’t sustain 20 per Like Mundell, Elenis worries that a hocent (13 per cent HST + 4 per cent hotel tax + tel tax for Toronto would set a precedent for 3 per cent DMF). other Ontario municipalities to follow. Other The issue is not confined to Toronto hotels, municipalities in the province are already he said. “It’s a tax on Ontarians since one in talking about ways and means of helping botthree stays in Toronto is by people who live in tom line taxes. “You are leading into a disaster Ontario. It’s no different from tolls or the cost of when it comes to a hotel tax,” he said. City of Toronto competitiveness electricity — it’s a tax on the family vacation,” “And it’s not just restaurants — the situGTHA commissioned CBRE to conduct he said. “It’s a tax on small business and a tax ation spreads to restaurants and attractions, an extensive study of the competitiveness of on investors.” retail and entertainment. It affects the whole hotels in the city of Toronto, which they have He also expressed concern that the tax could economy, including jobs,” Elenis added, notpresented to city council and the Economic expand across the province. “We’ve heard other ing that those sectors employ 315,000 people Development Committee. [Ontario] mayors want the same deal as To- in Toronto. The study found that Toronto has the ronto.” “It’s a tax for Ontarians travelling in the second lowest net operating income (NOI) province. Most of the visitors to Ontario descompared to the top 17-20 North American ORHMA joins the fight tinations are travelling within the province. destinations. (The lowest was Montreal.) ToTony Elenis, president of the Ontario Res- They go to downtown Toronto for weddings, ronto’s average total RevPAR was $80,000 per taurant Hotel and Motel Association (ORH- for business and meetings. It’s another tax for room, compared to Chicago, with a similar MA), hearkens back to 2004, after the City of Ontario. It’s easy to say it’s a tax on visitors population, which has average total RevPAR Toronto had gone through SARS and 9/11. — there’s no public outcry. But the highest of $115,000 per room. Vancouver is higher The city kept cutting back on funding for Tour- proportion of visitors are from Ontario. than Toronto, and Montreal “It’s only a year ago that is a little lower. Toronto electhe industry started meeting tricity costs are the highest, the average rates of the year for example. 2000, but profit margins are The study also found the NOI (C$) ADR (C$) not what they used to be benumber of hotel rooms in cause of rising prices. Toronto, 25,000, has actually NASHVILLE, TN $46,210 $250 “A room tax would penaldeclined by over 200 rooms ize business and at the end since 2000. The 905 districts NEW YORK $38,000 $454 of the day, leads to concern right next door have added about jobs.” over 50 hotels or 5,500-6,000 TORONTO $18,450 $194 The jobs situation applies rooms during that same pemainly to youth. Ontario emriod, and now have 19,000 MONTREAL $12,860 $175 ployment figures for youth behotel rooms. That’s a similar tween the ages of 15 and 24 number of rooms to VancouSOURCE: CBRE Hotels, Comparative City Hotel are below the national averver or Montreal. Operations Study, 2016 age, and 35 per cent of those “This gives the city of youth work in the hospitality Toronto a competitive situaindustry.

HOTEL PROFIT IN MAJOR CITIES

PARIS — An Austrian luxury hotel says it’s ditching electronic room cards for old-fashioned locks and keys after having its system frozen by blackmail-hungry hackers. The husband-and-wife management of Romantik Seehotel Jaegerwirt, in the Austrian Alps, says that one recent infection with ransom software resulted in the complete shutdown of hotel computers. They say they were forced to pay nearly $1,600 USD worth of electronic currency to restore their network. It was incorrectly reported that the ransomware infection resulted in guests being locked into or out of their rooms. In a series of emails, the hotel said that the infection only resulted in new guests being temporarily unable to get keys to their rooms.

Global interest in Canada rises TORONTO — With Canada’s 150th anniversary approaching, global travel deals publisher Travelzoo, in early February, released results from the Travelzoo Spring 2017 Travel Trends Survey showing that Canada is projected to have an uptick in popularity this year. Results show that interest in visiting Canada for Americans and Germans nearly doubled from 2016. In addition, interest from Chinese, Spanish and British travellers increased in 2017. Canadian respondents also voted Canada their number one destination this year, tied with perennial beach favourite, the Caribbean, and beating last year’s number one choice, the United States. Inspired by Canada’s popularity and the upcoming sesquicentennial, Travelzoo is launching 150 days of Travelzoo Tips highlighting top Canadian destinations, travel advice and insider recommendations.

Marriott retools mobile app BETHESDA, MD — Marriott International, Inc. on Feb. 7 launched the newly redesigned Marriott Mobile app for iOS users in five languages, with Android coming soon. The revamped app provides new and expanded digital features; customized travel content; one-button navigation; and a new swipe-able discovery home screen. The Marriott Mobile app for IOS is available in the App Store in English, Chinese, Spanish, French and German. Following this year, Android users will be able download the app in Google Play.

Le Méridien themed break menus CHICAGO — Le Méridien Chicago-Oakbrook Center, in partnership with hotel-concept company Wischermann Partners, has introduced new meeting break options. The first program of its kind, Le Méridien Chicago-Oakbrook Center’s newest menus offer a full sensory experience of the true offerings of Illinois, from its agricultural roots to the city centre. Themed menus include Illinois Farm Table (locally soured, sustainable ingredients for smoothies, juices and pastries), Nuts on Clark (caramel and cheese popcorn, candied house nut mix, lemonade and sweet tea) and Sweet Home Chicago (self-serve Chicago candy, including Lemonheads, Snickers, Red Hots, Dots and pretzel bites with lemonade and iced tea to wash it down).

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he bathroom is among the most memorable touchpoints of a guest’s experience. We all remember the horrors of some bathrooms we’ve stayed in, and we also remember truly great ones. The bathroom is an intimate room. The possibilities in design provide creative minds with an opportunity to instantly elevate a guest’s impression of a hotel, from blasé to boutique. (The bathroom) is very important, right next to the comfort of the bed.” Those words, from Justin Colombik, senior designer at Puccini Group, a San Francisco-based interior design and branding/ marketing firm specializing in restaurant and hospitality projects, neatly sum up bathrooms’ importance to the guest experience and how they can affect perceptions of quality. “A poor bathroom experience, whether it’s in a guestroom or a public area of a hotel, can leave a bad impression,” said Sam Bernard, global category director, research, design and development, in Dyson’s professional and lighting division. “Similar to how people react to seeing a dirty public bathroom in a restaurant (the notion that a dirty bathroom means a dirty kitchen) can be attributed to hotels. A great bathroom experience can help lead to a feeling of comfort in how the whole facility is being taken care of.” So what’s hot in hotel bathroom design? LAVISH RETREAT “Not being a trend is what’s hot! I like to present clients with a unique experience for the end user, with the final product serving as the ultimate escape,” says Colombik. “Invoking the feeling of entering a lavish retreat can be achieved through simple touches like crafted finishes or blurring the line between architectural walls, leaving undefined where the bathroom starts and the bedroom begins; tall architectural doors that can both close and open a space at the same time; large showers, deep bathtubs and a great vanity experience. To capture this, I like to use unexpected materials that a guest can see and touch. This starts with a great texture on the wall, which leads to the vanity countertop and then on to the plumbing fixtures. Veined stone vanity counters, bright illuminated backlight mirrors, concrete tile floors are all trends that can give a bathroom that special touch.” Also popular, he says, are freestanding furniture, like vanities; a shower — rain heads, multiple nozzles, textural finishes — that feels like a spa; open panels in the shower, instead of doors or curtains; clean architectural lighting; residential textures (“to me, residential means more expressive and crafted”); and natural finishes such as honed stone, concrete and semi-glazed tiles. In terms of materials, popular choices include patterned concrete floor tiles and veined natural honed stones, while colour palettes are favouring deep charcoals, putties and silvers, according to Columbik.

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Luxurious Lair Luxurious Layer Hoteliers are going the extra distance to bring luxury and style to in-room bathrooms. By Don Douloff He’s also seeing wall-mounted one-piece toilets. “Even though the very idea of finding a toilet a pleasurable experience may feel taboo,  it is so important from a design and finishingtouch point of view. They are less expensive, cleaned-lined and easily maintained.” INSIDE DESIGN Keeping a keen eye on hotel bathroom trends is Judy Henderson, the owner of Inside Design, a firm focusing on modern hospitality design. Based in Vancouver, with a list of global clients including Hilton, Western and Coast Hotels, Inside Design has an experienced team with a reputation for innovative design and precise project management. Henderson identifies a number of trends, including culturecentred design (colour, material or curated pieces reflecting the property’s location); textured surfaces (materials such as a feature wall behind the basin or in the shower area; honed stone surfaces); sound and vision (flat screen built into mirrors; speakers built into the ceiling; the ability to watch a movie or news while in the tub or while getting ready at the sink); special finishes (copper/rose gold accents; black taps; elegant lighting); and inspiration taken from nature (wood vanities). Tile styles are leaning towards a porcelain marble effect or grey and slate colours to contrast with special finishes, says Henderson. On the colour front, “bathrooms are the neutral backdrop to more saturated tones elsewhere in the hotel room.” Another key part of the bathroom experience is amenities, and in this area, “hotels are experiencing that today’s guests do not merely want to consume. Ethical and ecological values increasingly have become deciding factors. Especially body care products are expected to be safe, both for the skin and the environment,” observes Paul Weber, vice-president, sales, for ADA Cosmetics International Canada. More significantly, since bathroom amenities are experienced ‘up close’ by guests, these cosmetics “are inextricably linked to the quality of a hotel. They must therefore be able to convey a sense of complete well-being without compromises,” says Weber. TOP-NOTCH AMENITIES “There is a push to really impress the guest with top-notch amenities to not only enhance the guest experience, but also to increase the chance that the guest would like to purchase these amenities at retail,” says Steven Salhany, partner/vice-president at The Mansfield Robe Company. Indeed, Salhany reports that “we are seeing many of our hotel customers place orders for retail” for Mansfield’s upscale-model robe. “There obviously is a demand and hotels are bringing in new revenues through from retail.” Heidi Luber, president of Lubertex, an importer of robes

and towels, says white remains the go-to colour for in-room robes (which increasingly feature hotel brands’ logos), with combed cotton being the preferred material thanks to its softer feel. In response to guests’ requests, more four- and five-star hotels are offering child-sized robes. Standard Textile is offering robes from New York fashion designer Heidi Weisel, who met the company’s CEO Gary Heiman, and talked to him about her frustration with the boxy, shapeless terry-cloth robes she found in hotels. Together they created a robe that met both her design standards and the demands of institutional laundering. When it comes to towels, three-star hotels are upgrading their in-room offerings to brands and styles “that have the look and feel of better quality,” noted Luber. Combed cotton yarn reigns. In the sanitary ware area, much is afoot. Popular trends include intuitive showering, where simplicity and design-forward thinking rule; single-lever faucets; and tub-free bathrooms, since guests prefer showering, according to a brand spokesperson for LIXIL Americas, the business unit under which American Standard, DXV and GROHE operates. Trending, too, are such bathroom features as spacious countertops; better lighting, making it easier for women to apply makeup and for men to shave; and glass walls separating the toilet and bedroom, allowing natural lighting and opening up the space while allowing privacy, noted the brand spokesperson. Guests, especially millennials, are concerned about water efficiency, typically addressed by low flow-rate toilets and showers, which encourage water conservation.

Heidi Weisel robe collection.


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Kimpton Hotel Sacramento, King guest bathroom

OPUS Hotel Vancouver Guestroom Signature Suite Bath

Moen Align MB

OPUS Hotel Vancouver Guestroom Balcony Studio

SUSTAINABILITY Echoing those words is Dyson’s Bernard, who notes, “a drive towards sustainability continues to be a big trend. Guests, whether they are staying at a discount hotel through to luxury, are demanding greater environmental consideration from hotels. In hotel bathrooms we’ve seen a continued emphasis on in-room initiatives such as ‘hang up the towels you want to reuse.’” “We’re seeing excitement around Matte Black finishes for the bath,” noted Garry Scott, vice-president, marketing and e-commerce, Moen Canada. “Designers want a unique finish that makes a statement in a space, and Matte Black answers this need. Plus, its contemporary look complements a variety of decor choices, making it easy to create a cohesive look throughout a room.” He added that the growing availability of Matte Black finishes gives hotels added options when designing their bathrooms, allowing them to create spaces that suit their chosen aesthetic — especially if they prefer a contemporary style. Moreover, the growing availability of stylish, low-profile bathroom faucets makes it simpler for hotels to create spaces that are both beautiful and functional, even when square footage is limited, says Scott. “Many of these fixtures also offer features that improve guests’ experiences in the bathroom.” Hoteliers are certainly devoting great creativity and resources to enhancing the bathroom experience. Choice Hotels Canada’s Comfort Truly Yours design program has resulted in bathrooms offering upscale, spa-like features. “Designed using feedback from our guests, the upgraded bathrooms feature shower stalls in king-sized bedrooms, vanities with shelves below the sink to remove clunky towel racks, and the new RIAO amenity collection,” said Brendan Gibney, senior director of franchise services. Since implementing the upgrades, “our Comfort properties have seen a positive improvement in overall bathroom and guestroom scores through our guest satisfaction survey,” he said. Hotels, said Gibney, “must realize that mildew, cracked tiles,

Opus Hotel Vancouver Guestroom Standard King

stained shower curtains and dated furnishings in bathrooms can misrepresent the entire property. The appearance of a well maintained bathroom is a strong indicator of overall cleanliness, which builds consumer confidence in the total hotel experience.” FAIRMONT RENOVATION Fairmont Hotels will soon have completed nearly $1 billion to restore and renovate its hotels in Canada, the U.S. and Bermuda, and “in every case, the bathrooms have been completely renovated to enhance the guest experience,” according to vice-president Jane Mackie. Bathroom improvements include larger showers, better lighting and more counter space for guests’ personal items. At Delta, Marriott and Gaylord, “our ethos across all of these brands is to make the bathrooms feel as much like a relaxing spa experience as possible, to ensure that each and every one of our guests feel pampered and has a positive and energizing experience during their stays with us,” said Teri Urovsky, vice-president, design and project management, global design, Americas. “We do this by focusing on well-thought-out design with clean lines and a modern aesthetic; the inclusion of natural light, where possible; great lighting in the vanity and shower areas; high-quality showers; the use of upscale materials such as granite for the countertops, and offering our guests fantastic amenities.” Newly designed Marriott bathrooms offer a complete shower experience instead of a tub/shower combination, “as our research showed that very few guests, barring those with small children,  were using the bathtubs to take an actual bath,” said Urovsky. “In the Marriott brand, we are converting our tubs to showers and it is the goal that by 2020, 75 per cent of the total room count of Marriott hotels globally will have showers.” “We’ve also been very focused on the shower experience itself. Having a great shower is how many of our guests want to start their day and we are mindful of that,” said Urovsky. “When designing a shower, we take into consideration the water pressure, the temperature, the pulsation offered in the showerhead

– every detail is thought through. With Marriott, we’ve added a handheld wand in addition to the showerhead to provide a more immersive shower experience. Some of our guests don’t want to wash their hair every day, and providing a wand allows them additional flexibility.” LUXURY ALL THE WAY At OPUS Hotel Vancouver, it’s luxury all the way, with heated floors, jetted soaker tubs, separate walk-in showers, Frette bathrobes and premium Malin and Goetz bathroom amenities displayed in wall-mounted dispensers, according to general manager Nicholas Gandossi. Trump International Hotel & Tower Vancouver, which opened Feb. 28, elevates the guest experience with design finishes such as Nublado Italian marble bathrooms, heated marble flooring and Toto granite sinks, said general manager Philipp Posch. Further pampering guests are Victoria + Albert freestanding soaker tubs, towel warming racks and Gessi Emporio bathroom accessories. Lighting around bathroom mirrors’ perimeter eliminates shadows, enabling women to apply makeup better and easier, he said. Even bathroom tissue has been strategically sourced. “Toilet paper might be a funny topic, but it’s a really big issue for many people. We use residential toilet paper rather than commercial toilet paper. This costs more, but ensures guests feel more at home.”

Fair CosmEthics amenities

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HAC Conference celebrates 25 years

HAC president Susie Grynol addresses the conference.

TORONTO – The 25th annual Hotel Association of Canada Conference, held Feb. 15-16 at the Sheraton Toronto Airport Hotel and Conference Centre, had record attendance thanks to a new location, interesting lineup of speakers and a chance to meet new HAC president Susie Grynol. Orie Berlasso of Big Picture Conferences confirmed that the 425 people at the conference set a record for the best attendance since 2005. Calling HAC president Grynol “a ball of change,” outgoing chair Philippe Gadbois introduced her at the first conference since she took the reins of the association four months ago. Grynol says the HAC’s strength is its ability to influence policy thinking and drive political change. She acknowledged the contributions of her predecessor, Tony Pollard, and said she has three goals for the association: — To build its profile as an association; — To promote member engagement; and — To streamline the advocacy profile. She plans to distill the association’s priorities down to one or two top concerns. “Being all things to all people is not a winning strategy,” she told the audience, encouraging them to share their thoughts by filling out a survey available on the conference tables. “I’m absolutely fired up about the journey that lies ahead,” Grynol said.

Keynote takes the air out of Airbnb

Jason Dunkel of Environics Analytics and Waseem Shaikh of McCann Canada.

In a presentation titled, “Taking the Air out of Airbnb,” keynote speaker Tony Chapman told attendees that hoteliers have two choices in difficult times: to make things happen and thrive or rely on price and struggle to survive. He talked about five things he would do to create a people experience for guests: making sure your business is more personal; practising authenticity and transparency; providing local knowledge; ensuring consistency in such crucial areas as Wi-Fi; and realizing that it’s a small, small world, meaning that hotels should contribute to their local neighbourhoods and charities.

Hall of Fame The HAC Hall of Fame awards were presented throughout the day. Robert Housez, general manager of The Chelsea Toronto accepted the Humanitarian

From left: Michal Wasuita of Pine Bungalows and Michael Van Dyke of Ecolab.

Scope and scale the new game in town Continued from page 1

Outgoing chair Philippe Gadbois (left) and incoming chair Vito Curalli.

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Award from Garther Peterson, regional sales manager for IDeaS. For the past 15 years, Chelsea Hotel has raised money in support of its charitable partners: Special Olympics Canada, Habitat for Humanity Toronto, and the SickKids Foundation. The Chelsea Charity Golf Classic has raised over $1 million for the aforementioned charities. In 2013, Chelsea Hotel announced a new partnership with SickKids Foundation, in which the hotel committed to a five-year fundraising plan with a goal of $500,000 to support AboutKidsHealth. So far, the hotel has raised close to $300,000. CLIQUE Hotels & Resorts of Calgary and Canmore, Alta., received the Human Resources Award, sponsored by JRoss Hospitality. CLIQUE takes great pride in being one of the best employers to work for because of their solid HR practices and fun work environments. They recognize the importance of a work life balance and thus hire enough staff so their team members are able to earn a living while still having time to enjoy their surroundings. Michal Wasuita of Pine Bungalows accepted the Green Key Environment Award from Michael Van Dyke of Ecolab. Pine Bungalows, situated in Jasper National Park, celebrated 80 years of operation in 2016, has been owned by the Wasuita family for over 42 years and is recognized as one of the park’s leaders in environmental stewardship. They are the first member of the Green Tourism Canada to be registered in Alberta – a rigorous and thorough process. Pine Bungalows is proud to have obtained a Gold rating. In a session provocatively titled, “Fifty Shades of Stay,” Jason Dunkel of Environics Analytics and Waseem Shaikh of McCann Canada drilled deeply into the detailed statistics and other information available regarding Canada’s many diverse groups. By using data on ethnic diversity, including immigration patterns, neighbourhoods, generational differences and 68 precise demographic groups, hotel marketers can precisely target audiences in the right language and using the appropriate tone. By doing that, they can attract and better connect with these groups, ultimately boosting hotel revenue. Philippe Gadbois of Atlific stepped down as HAC chair after three years at the helm, and Vito Curalli of Hilton took over.

“We’re never going to catch up and have no aspiration to catch up.” The key concept for Hyatt is “purpose-driven growth.” Tarr pointed to the acquisition of Miraval as an example of one of Hyatt’s purpose-driven moves into adjacent spaces. Hyatt acquired resort and spa operator Miraval Group in January as a health and wellness offering, and is considering rebranding some of its resorts and spas with the Miraval or Life in Balance names. Larone’s comment on scope and scale put it all in perspective. “If we look at Expedia — the marketing capital of Expedia — even if we put all of [the panellists’ companies] together, all of you wouldn’t [match Expedia.]” He asked panellists if they thought they had enough scale to co-exist with the OTAs.

“We don’t view it as a zero-sum game,” said Tarr. “Intermediaries are a very important distribution source for us, as an entree for new customers. True brand loyalty is reserved for us. Our customers like to look around — we don’t view them as a competitor.” Balsley added that the scale of the OTAs does put a much higher burden on branded hotels to create a great experience. “We own the hotel experience,” she said. “Expedia may own the initial transaction, but we create the experiences.” Cleary, whose company, Marriott, now has 30 brands, said, “some customers are very brand loyal and love that brand. We use psychodemographics when we design the brands. The power of loyalty means a lot of customers don’t care what SPG markets — they’re loyal to the program.”


Profile: Navigate Design

Weslodge Saloon is located in the world’s tallest hotel, the JW Marriott Marquis Dubai. Left: Navigate co-founder Maher Murshed.

By Don Douloff TORONTO — Despite being in business a mere two years, Toronto-based Navigate Design has, in that short time, cultivated an enviable roster of prestigious clients, worked on highprofile projects, and won a design award. Launched in March 2015 in west-end Toronto offices, Navigate was founded by Maher Murshed and Ken Lam. Murshed has been involved in the construction and design industries for over 15 years and

Lam has been a designer for 15-plus years. In addition to his role as president of Navigate, Murshed is chairman of the Ascent Group, a conglomerate that owns and operates a portfolio of companies in South Asia and is active in education, retail and construction. He is also president of ICON Legacy Hospitality, which designs and operates hotels and restaurants in North America and internationally. A fully integrated design studio, Navigate specializes in retail, residential and hospitality spaces, but focuses almost exclusively on hospitality projects. From the get-go, Murshed and Lam had a specific vision for Navigate that sets the company apart from the herd. Navigate’s unique approach to design focuses on brand-centric, immersive experiences, and the firm strives to “materialize the identity of a venue, from the interior of the physical space, through to the digital space, digital marketing and design,” said Murshed. To that end, Navigate’s braintrust has assembled a team of specialists from a variety of disciplines such as interior design, graphic design, product development and project management, offering clients a complete design so-

lution, from beginning to end. The company follows a process called Integrated Inspiration, a project management initiative that aligns every facet of a project to express the essence of a brand. Navigate’s projects have taken shape in prominent cities spanning North America and the Middle East, and of the 35-plus projects the company has been involved with, 20 are complete solutions, said Murshed. Perhaps the jewel in Navigate’s crown is Weslodge Saloon, located on the 68th floor of the world’s tallest hotel, the JW Marriott Marquis Dubai. Typically, Navigate’s projects “need to add value to a community and fill a gap there,” noted Murshed. Dubai “didn’t have a modern North American saloon that celebrates the cuisine and environment of North American culture.” That, coupled with the fact that more than 40,000 Canadians live and work in Dubai, convinced Navigate’s team that Weslodge would be a good fit for the city. Indeed, since opening in March 2016, Weslodge Dubai has become a focal point of the city’s Canadian community, said Murshed.

Lam and his team worked to create a space that is whimsical, eclectic and dedicated to Weslodge’s origin (the first Weslodge opened in downtown Toronto in 2012), while infusing the brand’s identity into the thriving business district of Business Bay. Weslodge Saloon Dubai’s cutting-edge design caught the industry’s attention, earning the 2016 Commercial Interior Design Award for Best Interior Design: Bar & Clubs. In January, Navigate’s most recently completed project, Morah, a 140-seat restaurant located on the 71st and 72nd floors of the JW Marriott Marquis Dubai, opened. In Miami’s South Beach, Navigate is designing a 180- to 200-room boutique hotel that will evolve in four structures, two new-builds and two existing buildings currently under renovation. That project is expected to start opening in phases beginning at the end of this year, said Murshed. Looking ahead, Murshed says longer-term plans call for the company to build and add to its team and renovate its Toronto headquarters, and to continue building brands that can compete in the global marketplace.

University of Guelph’s HAFA program is now HTM

Statia Elliot (right), director of the University of Guelph’s School of Food, Hospitality and Tourism Management and Bill Murray, assistant professor.

GUELPH, Ont. — Terminology has changed in the 48 years since the University of Guelph’s Hotel and Food Administration (HAFA) major was first launched. In 1969, the term “administration” was a term common in business as a general management concept. Today, “administration” has a different connotation. The new name of the program is Hospitality and Tourism Management (HTM). “We are developing leaders for business, and ‘management’ is more reflective of what we do,” Statia Elliot, director of the school, told CLN at the recent Hotel Association of Canada conference, adding that the new major will launch in fall, 2017. The structure will consist of a common set of courses in the first and second years for all students. In the third and fourth years, they will be able to select one of the three areas of emphasis: Hotel and Lodging, Restaurant and Foodservice or Tourism Management. Students do not currently have that opportunity. “With 150 students, we don’t have the flexibility to cover everything to the same degree

of depth, for students who have identified their career path,” Elliot said. The new structure will allow for more indepth content in their senior level courses. For example, hotel students would learn more about hotel analytics and asset management. “Students can benefit from deeper expertise, while still focusing on foundation courses in their first and second years,” Elliot said.

Students can participate in co-op Students will be able to participate in the five-year co-op program, regardless of their area of specialization, Elliot said. Previously, only tourism students could participate in the one-year, paid co-op. In her 10 years at the university, Elliot has seen a number of changes. “There’s greater sophistication, new business models, analytics and understanding of changing markets. New technology means everything has sped up — shorter booking windows and decisions made in a shorter time frame. “HAFA is part of our heritage — alumni have remained connected for decades.”

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SAHIC to explore Cuba’s huge development potential By Colleen Isherwood, Editor HAVANA — The SAHIC Cuba conference will attract developers and investors from around the world who want to explore the tremendous growth in hotel development, real estate and tourism projected for the island nation. The inaugural SAHIC Cuba will be held in Havana May 15-16 at the Melia Cohiba Hotel, in the Veradero neighbourhood. Since 2010, Arturo Garcia Rosa, president of SAHIC South American Conferences and SAHIC Cuba, has travelled to Cuba, nearly on a monthly basis, to work exclusively with Cuban hotel companies to grasp an understanding of the infrastructure, policies and processes for tourism and hotel development in the Caribbean island nation. “It’s so exciting to have this new conference,” Garcia Rosa told CLN. “We have been working for so many years, and the Cubans have been waiting for this moment. At the end of 2014, Obama and Castro made some changes, and opened up some great opportunities.” Tourism continues to grow in Cuba and will continue to grow at surprising levels. Since

December of 2014, the country’s tourist arrival rate rose 7 per cent, a notable percentage for a two-year period of growth. As of Dec. 30, 2016, Cuba reached four million tourist arrivals, an increase of 13 per cent as compared to 2015. And so tourism has become the second largest generator of income in the country, behind that of professional services, reaching $2.8 billion in 2016. Looking at the projections for hotel development, 108,000 new rooms will be added by 2030, with an average of 8,000 rooms added per year over the next fourteen years. Key hotel groups supplying this growth are Grupo Gaviota, Gran Caribe, Cubanacan and Isla Azul groups. Additionally, the Cuba Golf group will add hotels, real estate, golf courses and various other amenities. And prior to its acquisition by Marriott, Starwood had agreed to operate the Four Points Miramar of the Gaviota group, which opened last June. Various airline operators are increasing flight routes to Cuba - American, JetBlue and Delta. Newcomers include Austrian Airlines, Pegas, Virgin Atlantic, Itaca, Turkish and Euorwings

which plan to establish flight routes this year. Delegations from Cuba came to two previous SAHIC conferences: Lima, Peru, in 2015 and Guayaquil, Ecuador, in 2016. “Cubans need money, but they also need knowledge and expertise,” Garcia Rosa said. “That’s why we are so excited — hotel companies come to be involved. They need expertise in architecture and construction.” The main focus is the hospitality industry and real estate. There are some huge mixed use projects — five huge projects in different locations, each of them about $200 to $500 million USD. Garcia Rosa estimates the conference will attract 250 to 300 people. In the future, there will be more SAHIC conferences, thanks to SAHIC’s alliance with Jonathan Worsley of Bench Events, international conference organizers. The 10th SAHIC South American conference will take place in Buenos Aires, Argentina in September. Garcia Rosa also foresees future SAHIC conferences in the Caribbean, Central America and Mexico. For information, go to sahiccuba.com.

Arturo Garcia Rosa, SAHIC founder.

Internet evangelist kicks off HNL Annual Conference •

GANDER, N.L. — Hospitality Newfoundland and Labrador kicked off its Annual Conference and Trade Show Feb. 22 with writer, broadcaster, futurist and self-proclaimed Internet evangelist, Jesse Hirsh, delivering the keynote address to delegates. The conference, which took place in Gander from Feb. 21-23, provided a platform for tourism stakeholders, learn about and discuss the various opportunities and challenges that exist within the tourism industry. “Hospitality N.L. wants to ensure that all tourism stakeholders – operators, organizations and government – are educated on the rise of the sharing economy and prepared to maximize opportunities, address regulatory concerns and most importantly, continue to deliver safe and unforgettable tourism experiences that showcase the best of Newfoundland and Labrador,” says Hospitality N.L. chair Dion Finlay. Following the keynote address, Hirsh was joined on stage by a panel of industry stakeholders and champions to further explore the opportunities presented by the sharing economy. The Honourable Christopher Mitchelmore, Minister of Business, Tourism, Culture and Rural Development, addressed provincial tourism luncheon and presented the Doug Wheeler Award. The afternoon sessions featured a discussion on tourism product development priorities and best practices in experience development, including a panel led by Carol-Ann Gilliard, director of strategic product development at the Department of Business, Tourism, Culture and

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Rural Development. To cap off the day, the Gander Host Committee hosted an exciting evening — delegates dressed up and had a wild time at a country western themed Fun Night. The annual Tourism Excellence Awards Gala on Thursday night was the grand finale to the Annual Conference and Trade Show, and featured the presentation of the Tourism Excellence Awards recognizing the outstanding tourism leaders and businesses that make great contributions to the provincial tourism industry. “Year after year, the provincial tourism industry continues to bring forth new levels of innovation and creativity that allow this province to deliver above and beyond travellers’ expectations,” says Finlay. “This ingenuity is just as common amongst long-time industry members who have dedicated many years to advancing tourism as it is amongst the newer generation who bring a fresh new perspective to the industry.” The following is a list of awards and award recipients. • H. Clayton Sparkes Accommodator Award of Excellence – Murray Premises Hotel, St. John’s, N.L. • Tourism Champion Award – Cathy Lomond, Hotel Port aux Basques, Port aux Basques, N.L. • CBDC Tourism Business Award of Excellence – O’Brien’s Whale & Bird Tours, Bay Bulls, N.L. • Cal LeGrow Tourism Innovator

Award – Cod Sounds, St. John’s, N.L. Tourism Corporate Partner Award – Marine Atlantic Inc., Newfoundland and Labrador Cultural Tourism Award – The Rooms, St. John’s, N.L.

• •

Sustainable Tourism Award – Mistaken Point Cape Race Heritage Inc., Trepassey, N.L. Doug Wheeler Award – Rick Stanley, Ocean Quest Adventures, CBS, N.L. Cruise Vision Award – Ashley Dicker

Cultural Tourism Award: L-R: Dion Finlay, chair, Hospitality N.L., Dawn Baker, The Rooms and board member, Honourable Christopher Mitchelmore, Minister of Tourism, Culture, Industry & Innovation.

The Tourism Champion Award was presented to Cathy Lomond (right) by Larry Laite, Hospitality N.L. board member.


CANADIAN LODGING NEWS REAL ESTATE Colliers: Hotel investment reaches new heights TORONTO — In 2016 overall transaction volume surged ahead of 2015 levels by almost 70 per cent, reaching nearly $4.1 billion with the sale of over 240 hotels and ranking as the second highest year on record for total volume after 2007, says Colliers International Hotels. Elevated activity was underpinned by a few key strategic deals and M&A activity; however, a host of positive economic and market indicators resulted in an overall healthy trading environment that should continue through 2017. This includes strong operating metrics, a healthy financing environment, the yield premium compared with other real estate classes, and the low Canadian dollar stacked against global currencies. Transaction highlights include:

2016

• The dominance of foreign capital was evident with cross-border groups, primarily from Asia, investing approximately $2.75 billion (67 per cent of total volume) into Canadian hotel real estate, largely for portfolio deals as a basis for further expansion in North America. • Portfolio deals accounted for 63 per cent of total volume for 2016. There were 10 portfolio transactions comprising 128 hotels across the country, totalling $2.56 billion, well above levels seen in the current cycle. • When strategic transactions* are removed, traditional deal volume has grown materially during the current cycle, trending above $1.5 billion over the past two years compared with an average of $860 million over

*In 2016, strategic acquisitions included the Four Seasons Hotel Toronto, InnVest REIT privatization as well as the Coast Hotels acquisition, all three of which transacted in September 2016. Strategic transactions typically involve at least two of the following conditions: 1) a pricing premium is paid; 2) the asset is located in a high barrier to entry market or within a geographic hub of an owner’s principal business; or 3) the opportunity allows for an extension of the company’s brand or portfolio.

Park Inn Vancouver Broadway

Diversified Eastern Canadian Hotel Portfolio (14 hotels)

Ucluelet Resort Portfolio

Oakville Hotel Portfolio

Windermere Resort Muskoka

Lakeview Edson East

Delta Sherbrooke

Colliers International Hotels

tario (58 per cent) and Quebec (11 per cent) which benefitted from strong growth in operating fundamentals. Colliers sees continued robust activity in 2017, estimated at $2.5-$3.0 billion in overall transaction volume, with a $1 billion portfolio already closed in Q1.

Colliers International Hotels is pleased to announce the completion of 45 lodging transactions in 2016 representing over $600 million in deal volume. Select transactions are highlighted below.

Sheraton Montreal Airport Hotel

Ottawa Marriott Hotel

the past decade — indicative of a growing and diversified buyer pool including investment acceptance by institutional players. • Traditional price per key averaged $99,000 in 2016, pacing 17 per cent above 2015 ($85,000) and ranking as the highest on record for traditional sales – demonstrative of strong market fundamentals. • Full-service trading accounted for the largest proportion of volume ($679M; 44 per cent). Acquisitions of focused-service ($475M; 31 per cent) and limited-service ($392M; 25 per cent) properties surged year-over-year with both segments seeing this level of investment for the first time in the current cycle. • Roughly 70 per cent of the trading activity occurred in Eastern Canada, primarily On-

Pantages Toronto Centre

British Columbia Resort Portfolio

Kitchener & Cambridge Portfolio

Holiday Inn Downtown Windsor

Hampton Inn Montreal Airport

Toronto Hotel Portfolio

Holiday Inn Express North York

Brokerage | Strategic Advisory | Debt Placement | Value -Add Research www.collierscanada.com/hotels March 2017 | 1 1


How market changes affect portfolio financing holder loans/distribution, or to subsidize working capital strain on other assets in the portfolio.

About CFO Capital CFO Capital is a commercial mortgage brokerage firm and administers its own commercial mortgage fund providing billions of dollars in

hospitality financing, including ground up construction, conversions and long-term financing. Since 2004, Mark Kay and his team, at CFO Capital, have supported the construction and term financing for all asset classes, including apartments, condominiums, retail, office, industrial and land.

2017 CBRE market outlook

By Mark Kay, CFO Capital We all understand how important it is to create the right financing structure for each project. While no one has a crystal ball regarding future interest rates, our primary focus is to consistently work with hoteliers’ portfolio of assets, providing strategies on each asset as it enters a different life stage. Our “ears to the ground” approach allows us to actively provide solutions using floating versus fixed-rate products.

The rise in 5 and 10-year bonds Although the market consensus is that interest rates will not be on the rise over the next couple of years, we can’t ignore the fact that since October 2016, the 5-year Canadian bond has already risen by 50bp, and 10-year bonds by 80bp. If you take a sample portfolio of hotel mortgages with an outstanding balance of $50M, assuming 25-year amortization, the investor will lose $1.2M over the course of a 5-year mortgage. An 80bp difference on a 10year mortgage would equate to an opportunity loss of $1.93M.

Economically challenged areas also affect rates When locking in interest rates, another fac-

tor to consider depends on the lender’s “spread” over the bond, cost of funds, or swap rates. On average, the spread is a larger figure in more economically challenging markets when compared to economically flourishing markets. Hence, in a diverse portfolio it is most optimal to lock in rates on assets that are within positive economic conditions. Floating/variable loans are ideal in three scenarios when financing, or refinancing, hotel assets: 1. Construction 2. If the hotel has not achieved stabilization and the hotelier’s objective would like to maximize their equity take-out 3. When the hotelier is expecting to sell the asset in the near future, since most floating/ variable loans have limited to no prepayment penalties

When is the best time to take out equity? For hoteliers who have assets in vibrant geographic areas where there is a surge in hotel performance, such as Ontario, with emphasis in Toronto (GTA), Vancouver, and Halifax, we are observing a trend in the “refinancing” of existing well-performing assets. The primary purpose is to acquire new assets, take-out share-

TORONTO — While occupancy remained at a constant 64 per cent for the past three years, ADR and RevPAR at Canadian hotels have been rising steadily. Average daily rate went from $137 in 2014 to a projected $154 in 2017. Similarly, RevPAR, which was $88 per room in 2014, is projected to be $99 per room in the coming year. While the overall picture shows some good overall results, there were differences among the projected RevPAR for the 13 major cities across Canada tracked by CBRE. Montreal, which celebrates its 375th anniversary this year, leads the pack with about a 9 per cent RevPAR increase projected for 2017. Vancouver, Niagara Falls, Toronto and Ottawa should also experience RevPAR growth of more than 5 per cent. Quebec City, Halifax, Winnipeg, Saskatoon and Regina, should see a 0 to 5 per cent RevPAR increase in 2017. Resource

markets will continue to lag, with Calgary, St. John’s and Edmonton looking at negative RevPAR growth figures.

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

CBRE’s RevPAR Rankings for 2017 Vancouver $149 Montreal $129 Toronto $126 Ottawa $119 Niagara Falls $115 Quebec City $113 Halifax $96 St. John’s $87 Winnipeg $84 Calgary $84 Saskatoon $81 Regina $77 Edmonton $72

Hotel Transaction Lawyers Buying | Selling | Refinancing

Phil Thompson 905.881.6505 Farheen Alladin 905.709.7464 www.thompsonlaw.ca

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Ten things to know about hotel real estate insurance From terrorism coverage for property and liability, which has become increasingly more often required by U.S.-based chains, to specific requirements for those who have shuttle services or spas, it’s important to deal with an insurance broker who knows the hotel industry. CLN asked Gordon Wells and James Asaad of Arthur J. Gallagher Canada Limited — Insurance, what hoteliers should know about real estate insurance. 1. What are some of the pitfalls for hotel insurance? Hoteliers that tend to focus on the premium cost, not the product itself. If their main focus is on receiving the lowest policy premium, they may be unaware of the shortfalls which exist within their policy and ultimately may find them self under insured and not in compliance with hotel brand insurance requirements. 2. What information do hotels need to provide to the insurer? Insurers require a plethora of information, including the value of the asset, revenue numbers and a hotel chain’s claim history. The biggest driver of premiums is the actual physical cost of protection — whether they have firehall hydrant protection (in a city) or not; whether they have sprinklers, concrete block construction, etc.

3. What are the different kinds of insurance a hotelier might need? Usually, the brand dictates what specific types of insurance is required. If the property is not branded, they will need insurance for the building, contents, business interruption, computers and liability, Shuttle buses and valet service or spa services add different elements of exposure to risk requiring insurance. Shut down of the hotel which exposes a business interruption loss for such perils as food & drink poisoning, infectious disease, murder/suicide, damage to reputation are some of the many perils that can be insured. Then there’s cyber insurance, innkeepers liability, crime and liquor liability, which is also very important for the operations of a hotel.

Lenders from the U.S. are requiring this, but many hotel brands headquartered in the U.S., are requiring this from their Canadian hotels as well. Terrorism that causes damage to the actual business, as in a blast, is almost always excluded from the standard commercial insurance policy. Terrorism insurance is purchased through a broker such as Arthur J. Gallagher Canada Limited from insurance companies such as Lloyds of London, Ace/Chubb, AIG and Liberty. Lately additional coverage for terrorism involving active shooter and VMA is now available. 6. What are some of the insurance requirements requested by the brands?

The lender or independent shareholder’s lender needs evidence of business insurance to the replacement value of the property. Some require evidence of business interruption insurance and liability as well.

Various brands have very specific insurance requirements built into their franchise agreements for coverage such as terrorism insurance. Some of the more unusual requirements request the policy to show no exclusions for “abuse,” assault and battery and/or “molestation,” which may create a problem for some insurers. Others require employment practice liability to cover lawsuits by employees.

5. What can you tell me about terrorism insurance?

7. What kinds of questions should you ask an insurer?

Terrorism insurance is becoming more commonplace for hoteliers, especially when lenders are life insurance companies or U.S. banks.

What expertise in both underwriting and claims do they have in hotels and how long have they written hotel insurance. As brokers, we make

4. What type of insurance do you need in order to secure hotel financing?

sure the insurer is involved and that they have a program for customers that specializes in hotels. Risk management and loss control experience for hotel exposures are extremely important. The Innkeeper’s Act is important — and insurers should know about it. 8. How do insurers match coverage with the client’s needs? In addition to ensuring that the brand insurance requirements are being met, appraisals which value the replacement cost of the property are highly recommended so to ensure that the building is adequately insured along with various coverage which is available to transfer the operational risks which a hotel faces from the hotelier to their commercial insurance policy. 9. What are the benefits of a good insurance program? As part of a program, there is a component of purchasing power which allows for broader hotel coverage and free loss control seminars. 10. How can we contact you? For more information on insuring your hotel, contact the authors at Arthur J. Gallagher Canada Limited — Insurance: Gordon Wells, Gordon_Wells@ajg.com or James Asaad, James_ Asaad@ajg.com.

Navigating Chinese hotel acquisition deals in Canada By Lorne Gross Lorne Gross is the managing lawyer of Lorne Gross & Associates, providing legal services in corporate and real estate law. Phone: 416-4536596. Email: lorne@ lornegross.com. The acquisition of hotels by purchasers from China is an extremely significant and fast-growing trend in the North American hotel marketplace. China’s growth story is historic in its speed and magnitude and is set to continue its record-breaking trajectory in the long term. This makes the understanding of Chinese-Canadian hotel deals – and the mutual understanding of parties to these deals – of great importance in today’s marketplace.

Focus on the similarities Most advice focuses on the differences between the parties of one culture and another. But I believe that rather than looking at differences (which are easier to put into marketable lists), we should also understand the similarities. In many respects, the Chinese buyer is no different than a buyer from Canada. He or she has human desires and motivations, has capital to invest and wishes to maximize return. A Chinese buyers wants to have a hotel attract a maximum number of guests and be managed in the most efficient and appealing way possible. Often, purchasers from China are within one of two general groups. The first is an entrepreneur new to the market with few business contacts and very little

knowledge of the Canadian marketplace and the second, an investor who has some experience in the Canadian marketplace with several past acquisitions. Of course, all investors may not neatly fit into such categories, but often show traits of these investor types. The new entrepreneur often (but not always) has a smaller amount of capital to invest, or is only willing to invest a relatively small amount of capital. These investors often seek to purchase an individual hotel or a relatively small property with a flag or recognizable franchise to start with. They also would not typically expect to be responsible for additional expenses to meet PIPs (requirements to improve the hotel based on what a franchisor wants). Such an investor often seeks a ‘turnkey’ operation. A different type of purchaser is one who has made or is seeking to make a group of acquisitions. Such a purchaser often has experience in the Canadian or international marketplace and is more familiar with the particularities of such a market and its regulations. This investor is often more willing to invest in a hotel with no brand, engage in improvements to meet outstanding PIPs, obtain a flag, or invest in a hotel whose status as a franchisee is in jeopardy and invest in PIPs to re-establish the brand. This type of purchaser may also wish to arrange their own management (within a flag operation) whereas a newer buyer is likely more willing to accept an existing longer term management agreement in place from the hotel chain. This is because, quite understandably, the newer buyer may not have the immediate ability and knowledge to arrange for management. It is important to recognize the objectives of the Chinese investor you are dealing with. If you are an agent, knowing which category they fall into and knowing the importance of solicit-

ing this information, will assist in finding appropriate targets. If you are the vendor of an asset, knowing the nature of a potential Chinese buyer will assist you in: (1) seeking buyers with whom you will negotiate most successfully, (2) positioning your property before selling it in order to attract your ideal purchaser and (3) negotiating most successfully with a potential buyer whose background and objectives you understand.

High expectations re cap rates One additional aspect to consider when dealing with Chinese buyers is their high expectations regarding cap rates. New investors and experienced buyers may often be quite surprised at the current low cap rate environment. Often, Chinese investors expect higher cap rates based on experiences in other jurisdictions

or even based on misrepresentations that local people make to them, to solicit their investment. In seeking the successful completion of a transaction, it is important to helpfully assist such an investor understand the reasons for the current low cap environment, particularly combined with the relatively higher risk of hotels as a real estate asset class. As a final note, Canadian sellers of hotel assets may find that Chinese purchasers require a longer period of time to complete transactions. This is because of new regulations requiring approval for funds exiting the mainland to make acquisitions. One solution is to create a due diligence exception and time extension, if this circumstance arises. It is important when negotiating with a Chinese party to understand that such a situation is not a ploy on the part of the Chinese investor, nor due to any lack of diligence on their part. Days Inn - Miramichi, NB

REPOSITIONING? Rebranding with Days Inn offers international recognition and a Canadian-based support team to help you every step of the way daysinn@realstarhospitality.com 416.966.8387

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OPENINGS, SALES AND RENOS Economic downturn forced Sawridge Inn to close FORT MCMURRAY, Alta. — Alberta’s continuing economic downturn forced the closure of Sawridge Inn and Conference Centre recently. According to a Sawridge press release, the hotel and conference centre will be turned into a dealership after its sale to Summit GM. Sawridge Group CEO John MacNutt said some of the hotel’s “long-service” staff transitioned to the Best Western and Sawridge Suites at TaigaNova. “The few remaining, obviously we really value our staff and we’re going to try and find opportunities for any that still remain,” he said, quoted in media reports. “But the majority of the staff right now are term employees that were brought in after the fire to help us run the business.” The press release said construction on the new dealership will begin in 2017, and Summit GM is working with architects to retain as much of the interior architectural features of the hotel lobby and conference centre as possible.

Days Inn opens in Levis, Que. TORONTO — Realstar Hospitality has opened a Days Inn franchise in Levis, Que., it was announced Feb. 14. Located at 1710 Route des Rivieres, the conversion property features 84 guestrooms, each outfitted with flatscreen TV, free Wi-Fi, mini-fridge and microwave. Additional amenities include free Daybreak Café breakfast, a business centre, fitness centre, swimming pool and sauna. The hotel offers free parking and pet-friendly rooms are available upon request. Currently, more than 110 Days Inn hotels operate across Canada.

Choice Hotels International continues global expansion ROCKVILLE, Md. — Choice Hotels International, Inc. is expanding with newly developed properties in top markets around the world, it was announced Jan. 24. The strong RevPAR performance of the company’s brands, coupled with the expansion of programs and services designed to increase franchisee return-on-investment, have helped to fuel an increase in new construction activity. The company’s upscale brand offerings, Cambria Hotels & Suites and the Ascend Hotel Collection, are driving Choice Hotels’ rapid expansion in urban markets. Furthermore, the successful Comfort brand transformation and the Sleep Inn brand’s new construction prototype have been catalysts for expanding their pipelines across the country. “2016 was another great year for Choice Hotels thanks to our smart brand strategies and having the right team to execute seamlessly,” said Patrick Pacious, president and chief operating officer, in a release. “As a result, developers have taken note of our RevPAR performance as well as our success of opening new construction hotels in top markets.”

Hotel X Toronto’s sister hotel named #1 TORONTO — The Aria Hotel Budapest, sister hotel of Hotel X Toronto, has been named #1 Hotel in the World in TripAdvisor’s 2017 Travelers’ Choice Awards, it was announced Jan. 25. The musically themed Aria Hotel Budapest was also named #1 Luxury Hotel in Europe and Hungary. Winners are chosen from reviews written by millions of visitors to the TripAdvisor site, who contribute in an uncensored, open forum. According to owner, developer and president Henry Kallan, dedication to exemplary service is in the Library Hotel Collection’s DNA, and the same award-winning approach will be evident at Hotel X Toronto when it opens this summer. The Library Hotel Collection won 18 Travelers’ Choice Awards not only for Aria Hotel Budapest, but also

1 4 | Canadian Lodging News

Hotel X’s sister property in Budapest, Hungary. Aria Hotel Prague, the Hotel Giraffe and Casablanca Hotel. The placements were in the categories of Best Hotels, Best Luxury Hotels, and Best Romance Hotels in Czech Republic, and Best Hotels and Best Service in USA.

Sawridge Inn Fort McMurray closed due to the downturn.

Former PEI convent reopening this spring as a luxury boutique hotel CHARLOTTETOWN, PEI — A former convent in Charlottetown is being converted into a luxury boutique inn and apartment suites that’s expected to open this spring, it was announced in mid-February. Sold to developers in 2014 and in the midst of a $9 million renovation, the 18-room boutique hotel will target deep-pocketed tourists and business travellers and is expected to open in May, according to The Globe and Mail. Instead of long-term rentals throughout the year, the suites will be available for stays of up to eight months during the off-season. In the summertime months, the rooms will be advertised through Airbnb at $450 per night.

Realstar Hospitality has opened a Days Inn in Levis, Que.

InterCon Montréal’s new ballroom MONTRÉAL — The InterContinental Montréal hotel has opened its new ballroom in the Nordheimer Conference Center, it was announced Jan. 26. Covering 3,365 square feet, the space features natural light that is reflected up onto the 17-ft. ceilings. In addition, the hotel has turned this project into an opportunity to revisit its entire offering. The history of the Nordheimer Conference Center, which now houses all the banquet rooms, can now take centre stage. The theme at the heart of the concept is legends. To that end, each room represents a different character, either historical or fictional. Each presents their own story, and carries their name. Each floor has its own theme, allowing guests to learn about the history of the hotel with the Discovery guide. This theme is also apparent in the new ballroom, named A. & S. Nordheimer in honour of the two brothers who gave the building their name. Showcasing the cultural and commercial past of this neo-Victorian building, its decor follows a piano theme, particularly by the use of black and white, with contemporary accents. This hall also offers a pre-function space and a hall. It can seat 300 people for a banquet, and host 400 people for a cocktail party. Furthermore, it offers up-to-date technological, audiovisual, sound and lighting equipment.

Microtel debuts in Aurora, Ont. CALGARY — MasterBUILT Hotels and Jayman MasterBUILT announced in late January the expansion of the Microtel Inn & Suites by Wyndham brand into Aurora, Ont. The Aurora Microtel Inn & Suites by Wyndham location will mark the brand’s sixth location in Ontario and the first Microtel located in the Greater Toronto Area (GTA). The hotel is intended to be a flagship location for the brand, featuring its new urban construction design. The hotel will be fully accessible and features the latest in safety and security in guestrooms and public spaces, including two electric car charging stations. The 100-plus guestrooms and suites will feature a mini refrigerator, mi-

Hilton’s new Tapestry Collection is the company’s 14th brand. crowave and in-room coffee, with select rooms featuring a full kitchen, separate bedroom and living room, ideal for extended stays. “When we first visited Aurora over a year ago, we knew right away that the town would be the ideal location to launch the new urban design of Microtel Inn & Suites by Wyndham in Canada. Aurora is a vibrant community with a great deal of growth and opportunity and we look forward to being part of it.” said Eric Watson, chief operating officer, MasterBUILT Hotels, in a release.

Hilton announces Tapestry Collection brand MCLEAN, Va. — Hilton announced in late January the launch of Tapestry Collection by Hilton, marking the 14th brand and second collection brand for Hilton. Tapestry Collection by Hilton was curated due to customer and owner demand for original upscale hotels that cater to guests seeking reliability and value in their independent hotel choices. Seven hotels have signed letters of intent with the collection in Syracuse, N.Y.; Chicago, Ill.; Nashville, Tenn.; Warren, N.J.; Hampton, Va., and two in Indianapolis, Ind. The collection has an additional 35 deals in process, with the first property expected to convert to Tapestry Collection by third quarter 2017. Further additions to the collection will be announced in the coming months. The Tapestry Collection by Hilton is positioned in the upscale segment just below Curio – A Collection by Hilton, which launched in 2014. Curio today operates more than 30 upper upscale hotels in seven countries, with another 45 in the global development pipeline.


THE WINNERS’ CIRCLE

Accent Inns hosted travellers affected by travel ban

Employers flock to Seneca Hospitality career day

VICTORIA, B.C. — Accent Inns offered complimentary accommodation at its Vancouver Airport Hotel location to Vancouver International Airport (YVR) travellers from the Muslim-majority countries affected by U.S. President Trump’s original travel ban, it was announced Jan. 31. “We at Accent Inns are saddened by any sort of discrimination,” said Mandy Farmer, CEO of Accent Inns, in a release. “We want to take a stand for what’s right and help anyone who might be affected in our community. Accent Inns welcomes diversity always.” Accent Inns offered complimentary accommodation for up to three nights to travellers who have been stranded due to the travel ban. Upon check-in, travellers must show the YVR airline ticket they were not able to use and a passport from Iraq, Iran, Libya, Somalia, Sudan, Syria and Yemen. Accent Inn’s Vancouver Airport Hotel offers free 24-hour shuttle service to Vancouver International Airport. Any stranded travellers could use the courtesy phone located in the baggage area of YVR to contact the hotel’s front desk for assistance. At press time, the U.S. travel ban was in a state of flux.

TORONTO — Over 700 Seneca School of Hospitality and Tourism students attended the 15th Annual Career Expo held Feb. 6 at Seneca Markham Campus, north of Toronto. Organized and led by the college’s fourthsemester Hospitality Students, the career expo attracted global and local employers recruiting students for both part-time and full-time employment. “Our association with Seneca has been very rewarding, as we see the next generation of hospitality leadership evolve,” said Todd and Marcia Finlayson, owner/operators, Finlayson Hospitality Partners Inc., McDonald’s Restaurants - York Region. “Beyond the formal training and knowledge transfer that one might expect at any institution of higher learning, the Seneca team members (students, faculty and staff) operate with an exemplary degree of hospitality in all their affairs. Hospitality is in their DNA, it’s apparent and very inspiring. After a visit to the Seneca Campus, we leave feeling a heightened level of inspiration about our great industry.”

ERA Architects & Broadview Hotel win Heritage Award TORONTO – In a ceremony held in the Legis-

lative Building at Queen’s Park in Toronto, OnMixing the history of the 1891 heritage tario Heritage Trust presented Andrew Pruss, property with the spirit of its east-end neighprincipal of ERA Architects, Les Mallins, presi- bourhood, The Broadview Hotel will offer 58 dent of Streetcar Developments and the project guestrooms, assorted event spaces, a ground team responsible for the revitalization of The floor restaurant, lobby café bar and a rooftop ofBroadview Hotel with the Lieutenant Gover- fering views of the cityscape. nor’s Ontario Heritage Award for Excellence in “Receiving this award is a testament to the Conservation, it was announced Feb. 21. talented work done by ERA Architects and the The award recognizes exceptional contribu- entire project team and the commitment we tions to heritage conservation, as well as lead- share to honouring and respecting the history of ership, creativity and positivity it fosters in its The Broadview Hotel,” said Les Mallins, presicommunity. dent of Streetcar Developments, in a release. “We are honoured to be the recipient of this “We look forward to continuing our work on award and thank the Ontario Heritage Trust for The Broadview Hotel and sharing its wonderful this recognition,” said Andrew Pruss, principal story with all.” of ERA Architects, in a release. “The Broadview Hotel has a rich history linked to the community of Riverside and we were privileged to preserve the landmark architecture of the building for many to enjoy for years to come.” Over 36 months, ERA Architects and the project team worked to conserve and maintain key architectural features of the 125-year-old landmark, including the circular arched windows, decorative brickwork and distinctive tower. The newly revitalized Romanesque Revival fa- L to R: Professor Thomas H.B. Symons, chair of the çade, revealed to the pub- Ontario Heritage Trust; Jeff Schnitter, VP Architecture, lic in October 2016, will Streetcar Developments; Andrew Pruss. principal, ERA welcome guests to the east- Architects; and the Honourable Elizabeth Dowdeswell, Lieutenant Governor. (Photo: Ian Crysler). end beginning this spring.

TECHNOLOGY

Expedia’s REV + for hoteliers.

Expedia launches revenue management tool SEATTLE, Wash. — The Expedia group is rolling out Rev+, a revenue management tool, to the Canadian market, it was announced Feb. 1. As part of Expedia PartnerCentral (EPC), the company’s partner portal, which is already live in the United States, helps hotels manage their properties and rates. Rev+ brings in new functionality enabling hoteliers to make pric-

ing decisions to optimize revenue. The new management tool comes at no additional costs for hotel partners, and doesn’t require additional sign-up. Expedia’s Rev+ provides hotel partners a view of pricing opportunities in their market and the tools to take advantage of them. Expedia plans to gradually roll out Rev+ to hotel partners across the world.

quently originate. Often prone to causing signal interruption due to competing APs transmitting on other floors, or providing weak signal strength due to shorter antennas used in modern devices, hallway APs have notoriously become associated with dropped connections and lagging speed.

ceptionist and a talking tulip in every room. Hilton has Connie, a concierge Robot that guests can ask questions of when they are in the lobby. Robots are being considered for housekeeping, delivering room service orders, and picking up dirty room service trays left in corridors.

Tech trends for 2017

BOCA RATON, Fla. — Hospitality software company Cendyn marked its 20th anniversary with the introduction of a new brand and repositioning of its comprehensive suite of products, it was announced in mid-January. As part of the launch, the company repositioned its products under the Cendyn Hospitality Cloud and has realigned its products into three core solution sets within the Cendyn Hospitality Cloud: the Marketing Cloud, the Sales Cloud, and the Events Cloud. This new structure creates a clear framework for targeted customer engagement, while also allowing Cendyn to rapidly scale the business. “This is a new chapter in Cendyn’s story,” said Tim Sullivan, chief sales and marketing officer. “It celebrates our evolution from a start-up to a mature company without losing sight of who we are and the achievements we’ve made developing innovative hospitality technology for over two decades.”

NEW YORK — Steve Wynn announced earlier this year that he is installing an Amazon Echo in every single room of his Casino in Vegas by end of this year. The unit, called Alexa, will allow guests to have their own personal butler in every room, opening or closing drapes, lowering or raising the temperature, turning on the lights, etc. On the robotics front, Henn-na Hotel, in Japan, features an English-speaking dinosaur re-

White paper advises on Wi-Fi CLEARWATER, Fla. — Properties now have access to insight on how Internet speed and connectivity can be maximized using an inroom access point (AP) network, regardless of budget or structural concerns, thanks to a white paper released by Hotel Internet Services earlier this year. The white paper pinpoints common causes of poor connectivity and where they all too fre-

Henn-na Hotel’s English-speaking dino.

Cendyn rebrands, repositions

March 2017 | 1 5


PEOPLE

Michael Bertuzzi, professor, Centennial College. Centennial College has named Michael Bertuzzi to the School of Hospitality, Tourism and Culinary Arts as its newest professor, it was announced Feb. 2. In addition to teaching tourism and hospitality courses, he will be leading the development of Centennial’s new Food Tourism postgraduate certificate program, which launches this fall. For the past five years, he has held a number of leadership and management roles with the City of Toronto, including supervisor of Pan Am/Parapan Am Games Tourism. Prior to working with the City of Toronto, Bertuzzi spent time in China developing local tourism businesses and managing hospitality programs at the Olympic Games in Beijing 2008, Vancouver 2010, London 2012 and Rio 2016.

Angelina Malik, Seneca College Hospitality & Tourism.

Michael Hayward, Seneca College Hospitality & Tourism

Brian Quinn, CHI, vice-president franchise development.

Victoria Nickle, spa manager, Four Seasons Hotel Toronto.

Allen Fusco, new IHG Owners Association chair.

Kathrin Jin, director, national sales, Travelodge Canada.

of the company’s web, customer and sales platforms. As head of a New York-based digital analytics agency, he helped SAP, Wharton School, Fairmont Hotels and others gain greater insights and revenues from digital platforms. As VP sales and marketing at Amica Mature Lifestyles, modernized the sales and marketing departments to prepare for acquisition. Hayward holds an MBA from the Rotman School, and a BA in Commerce, from University of Toronto. Choice Hotels International Inc. has appointed Brian Quinn as vicepresident of franchise development, it was announced in mid-January. Quinn will be responsible for leading franchise development in the U.S. for Choice brands, including Comfort Inn, Comfort Suites, Sleep Inn, MainStay Suites and Suburban Extended

Angelina Malik and Michael Hayward have joined the faculty of Seneca College’s School of Hospitality and Tourism. A graduate of Ryerson University School of Hospitality & Tourism, and a Certified Hotel April 3, 2017: Resorts of Ontario Administrator (AHLA) with a Conference and Trade Show, Deerhurst Master in Education, Malik has Resort, Huntsville, Ont. Contact: Miheld senior management and chelle Duff. Tel.: 705-325-9115 or 800executive positions with brand363-7227. Email: michelle@resortsofoned and Independent hotels in tario.com. Website: resortsofontario.com Canada and the USA over the past 20 years. She has worked April 3-4, 2017: B.C. Hotel Associafor Starwood Hotels & Resorts, tion and ABLE B.C. Summit 2017, VicMarriott International, IHG, toria Conference Centre, Victoria, B.C. Wyndham and Choice ProperWebsite: summit2017.ca ties. During his 23-plus year caApril 9-11, 2017: Alberta Hotel & reer at Four Seasons Hotels and Lodging Association Convention and Tradeshow, Fairmont Jasper Park Lodge, Resorts, Hayward led marketing planning and development

1 6 | Canadian Lodging News

Stay. Most recently, Quinn served as chief franchise officer at RLHC (Red Lion Hotels Corporation). Four Seasons Hotel Toronto has named Victoria Nickle its new spa manager. As Four Seasons’ senior spa director for the Americas, Nickle will manage the hotel’s 17-room urban retreat that’s also the largest urban city spa in the company. Before embarking on her career with Four Seasons, Nickle headed off on a “service-driven route,” opening the first Bliss Spa in London, then joining Steiner Leisure, where she was responsible for 17 spas and, eventually, new operations for partner hotels. She joined Four Seasons in April, 2011. Each B.C. tourism region will have a designated industry health and safety specialist available to assist tourism

and hospitality employers with their occupational health and safety needs, go2HR announced in late January. Mark Gilbert will be responsible for businesses and employers in the Northern B.C., Vancouver Coast and Mountains – West, and Vancouver Island regions. Stephanie Mallalieu will be looking after the regions of Cariboo Chilcotin Coast, Kootenay Rockies, Thompson Okanagan and Vancouver Coast and Mountains – East. Mallalieu brings more than 15 years of health and safety experience, with a particular focus on the food services sector. Gilbert possesses extensive experience in conducting gap analysis, safety program reviews and COR program audits. Most recently he was the health and safety advisor with Best Buy Canada.

May 15-16, 2017: Canadian Hotel Investment Conference. Westin Harbour Castle, Toronto. Contact: Vicki Welstead. Tel. 416-924-2002, ext. 233. Email: vickiwelstead@bigpictureconferences.ca. Website: hotelinvest.ca May 16, 2017: HOTELNEXT, Student Competition, Westin Harbour Castle, Toronto. Contact: Vicki Welstead. Tel. 416-924-2002, ext. 233. Email:

The IHG Owners Association, which represents InterContinental Hotels Group (IHG) franchise hotel owners worldwide, announced in late January that Allen Fusco has assumed chairmanship of its global board of directors for 2017. Fusco is owner and operator of both ANABRA Associates and Plainview Associates, which operate the Holiday Inn Express Horseheads, New York and the Holiday Inn in Elmira, New York, respectively.

Superior Lodging Development TL Corp. announced on Feb. 6 the appointment of Kathrin Jin to the position of director of national sales for Travelodge Canada and announced on Jan. 31 the appointment of Simon Caspi as director of franchising and development. Jin has spent many years in the hotel sales industry, most recently with Choice Hotels Canada as regional sales manager. She also brings extensive sales experience in the software and fivickiwelstead@bigpictureconferences.ca. nancial services industry. Jin will Website: hotelinvest.ca lead Travelodge Canada’s national sales team and be based May 15-16, 2017: SAHIC Cuba, in Toronto. Melia Cohiba Hotel, Cuba. Contact: In his new role, Caspi will Cecilia Corti. Tel: +54 (11) 5217-4543. work with Superior Lodging’s Email: ccorti@sahic.com. Website: sahicnational development team and cuba.com. will be responsible for growing the Travelodge/Thriftlodge and May 30-31, 2017: Saskatchewan Super 8 brands in Quebec and Hotel & Hospitality Association ConvenAtlantic Canada. tion & Trade Show, Regina. Delta Regina. Caspi comes to Superior Contact: Warren Nerby. Tel.: 306-522Lodging with over 15 years of 1664, ext. 2. Fax: 306-525-1944. E-mail: franchise development experiWnerby@sasktel.net. Website: shha.co ence with Starbucks and Boston Pizza.

COMING EVENTS Jasper, Alta. Contact: Jordan McKay. Tel.: 780-436-6112, ext. 248; E-mail: Jmckay@ahla.ca. Website: ahla.ca

Simon Caspi, franchise director, Superior Lodging Corp.


B E FO R E /A F TE R

HOSTED BY

Subtle airport theme at Radisson YYZ

The old lobby.

MAY 15+16, 2017 WESTIN HARBOUR CASTLE TORONTO

For 21 years, the Canadian Hotel Investment Conference has established itself as the definitive source for information, insight The new lobby.

By Don Douloff TORONTO — Last November, Radisson unveiled the multi-million dollar renovation at Radisson Suites Hotel Toronto Airport that has brought a contemporary look to its 216 suites, public spaces and fitness centre. Silver Hotel Group had a vision for this project: to “make people more welcome than the brand requirement,” said Ava Janikowski, president of Chase Architecture, which spearheaded the renovation. Based in west-end Toronto, Chase Architecture specializes in hotels and resorts. Projects include Touchstone Resort, a five- star vacation residence club set along 30 acres of Lake Muskoka lakefront, in Ontario cottage country; Boutique Hotel Lagos; and the Strathcona Hotel, in Toronto. Most noteworthy among the refreshed Radisson Suites Toronto Airport’s design features is an aviation theme that “reminds guests where they are,” said Janikowski. A four-minute shuttle ride from Toronto Pearson International Airport, the hotel now features aviation- and airportthemed design accents in the lobby, meeting rooms, public washrooms and corridors. Displayed in the lobby, for example, are artifacts such as Air Canada pilot hats; vintage airplane photos; mini airplanes; books; vintage posters advertising airports; and vintage pilot airline bags. The lobby and meeting rooms feature wall art depicting airplanes flying loops. Public washrooms feature photos of planes landing, while secondfloor corridors are hung with giant images of travellers walking through airports. Upgrades renovated all rooms, which include standard suites, extended-stay suites, two-bedroom executive suites and accessible suites with roll-in showers.

and opinion on today’s Canadian lodging market. In suites, furnished in a style similar to residential living rooms, the aviation theme is seen in accent pillows and, in bathrooms, photos of planes landing. Designed to be “purposely friendly and not hotel-like,” suites feature residential touches such as blue/green wallpaper; apples arranged on bar counters; desks that face into the room; and flooring that includes both carpeting (in bedrooms) and imitation wood. Suites, said Janikowski, provide “an escape from the business of the airport.” That residential feel continues in the lobby, which resembles a large living room providing guests a home away from home, said Janikowski. Enhancing that feel is an old wooden harvest table accented overhead with Edison bulbs, and comfortable upholstered sofas and armchairs. The design team added mid-century modern chairs “creating a fantasy look” and removed some of the lighting and replaced it with strategically grouped recessed LED lights, to soften the room’s visual ambience. Brand new, and open 24 hours a day, Aviator Corner Store sells snacks and travel accessories. The renovation completely revamped meeting rooms, installing, along with aviation-themed wall art, colourful carpet tiles and other touches that cultivate a playful feel, said Janikowski. Elsewhere, the fitness centre has been expanded and is now outfitted with up-to-date equipment and a brighter, more whimsical ambience thanks to walls coloured charcoal and bright red and hung with art depicting a male weightlifter engaged in his back-breaking labours. Self-serve laundry facilities have been installed near the fitness centre, allowing guests to clean and dry their workout clothes. Also new to the hotel’s health and wellness amenities is a yoga studio offering customized workouts.

CONFIRMED SPONSORS TO DATE

HOTELINVEST.CA BECOME A Call Vicki Welstead SPONSOR (416) 924-2002 x233

March 2017 | 1 7


Lending with hospitality BY COLLEEN ISHERWOOD, EDITOR

Canadian Western Bank Group (CWB) has launched a new division dedicated to the hospitality (hotel and restaurant) sectors across Canada, named CWB Franchise Finance, based out of Mississauga, Ontario. Canadian Lodging News (CLN) sat down with Ed Khediguian, senior vice president of the newly-established branch, to discuss the transaction that brought him and the team over to CWB, the approach being taken in creating their programs for the industry, and the vision for the business in the upcoming years.

CLN: Ed, it sounds like it’s been a busy year, can you tell us first about the background of your group and the sale from GE Capital to CWB? It has been a roller-coaster couple of years actually. Back in April of 2015, GE announced that it was unwinding its finance arm, GE Capital, and intended to exit through sale of all its capital divisions, and reposition the parent company back to its industrial roots. The Canadian Commercial Real Estate division was first to be sold to Wells Fargo and Blackstone, followed by the Equipment Finance platforms which were acquired by Wells Fargo and BMO. It wasn’t until early in 2016 that CWB entered into a purchase sale agreement for the Canadian Franchise Finance portfolio. The transaction closed on July 1, 2016 with CWB not only acquiring the portfolio but also hiring the entire Franchise Finance team as part of the transaction. We had been lending to restaurants since 2001 and hotels since 2002, so we’ve got a very experienced group in both of these sectors and CWB was excited to acquire our portfolio as well as the expertise of our team.

CWB FRANCHISE FINANCE TEAM

WATCH OUT FOR CRIS 2017 The Canadian Restaurant Investment Summit is an annual investment and economic conference in Toronto produced by CWB Franchise Finance and driven by our commitment to provide restaurateurs, lenders and investors with the resources, knowledge and vision to help make better restaurant and franchise investment decisions. Next year, the Canadian Restaurant Investment Summit moves to the Fall. Stay tuned for exact dates and location!

CLN: So why was CWB a good fit for your group, and vice versa?

The team from left: Cameron Woof, Account Manager, Hotel Finance; Ed Khediguian, SVP; Trish Halliwell, Account Manager, Restaurant Finance; Patrick Schofield, Portfolio Manager; Tara Mascitelli, Risk Manager; Dimitri Mazur, Account Manager, Restaurant Finance; Wendy Black, Documentation Specialist; Ian Ricci, Account Manager, Hotel Finance; and Jacob Mancini, Senior Manager, Restaurant Finance.

CWB is a Canadian-based financial institution offering business and personal banking, equipment financing, trust services and wealth management across Canada. They’re well known for the common sense approach they take to business, and their emphasis on a relationshipfocused strategy; this is particularly important for us in the hospitality sectors and is well-aligned to the spirit and culture that our team has always worked with.

CLN: What differentiates you from other lenders? We take a centralized, specialized, and national approach to lending across both the hotel and restaurant sectors. We are the one-stop financing solution for recapitalization and growth capital for both franchisees (unit level financing) and franchisors (corporate lending) and work to establish a deep understanding of the segments, brands, and the markets that they operate in. Clients do not have to explain their sector to us; we live and breathe it side-by-side

with them because of the focused nature of the mandate. While hospitality is a small part of larger portfolios of larger financial institutions, the focused specialization approach inherently makes it all we do, and our raison d’être. Bigger, more broadly-based institutions can get mired in bureaucracy, and now that we have set up this division within CWB, we can be nimble, entrepreneurial and creative to match the needs of our clients.


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CLN: What kinds of brands and operators are you looking to work with? We work with both the larger players as well as the smaller high-growth companies in the Canadian market. In fact, some of our most successful client relationships are with clients who started from a small base, and worked with us to develop their portfolios and brands. We’re seeking companies with high growth potential. The first step we take in establishing a financing program is to sit with the franchisors and make sure we know

all we can about the system, performance, and development goals and needs so that we can align financing structures accordingly. We do not take a cookie-cutter approach to lending within a brand, which is a key differentiator; and can be limiting to a multi-unit franchisee with embedded equity that wants to grow faster. We take the time to assess each brand and the specific operator needs within them.

About Ed Khediguian, Senior Vice President Well known on the conference circuit and on social media sites, Ed has more than 20 years of experience in the lodging, hospitality and restaurant industry. Prior to joining CWB, Ed led GE Capital’s Franchise Finance division for more than 12 years. He has both a Master’s of Management in Hospitality from Cornell University’s School of Hotel Management and a Bachelor of Commerce in Finance from McGill University.

CLN: So once you have vetted the brands, what kind of transactions do you look to do? We provide term lending for recapitalization, acquisition, or shareholder buyouts of assets and businesses, development lines for new store and hotel development, and for remodels and construction financing. In the restaurant sector, we also provide corporate lending for small to large regional and national high growth franchisors and

corporate store system companies, focused on providing the growth capital to the up and coming concepts. Now that we’re part of CWB, we are able to offer clients even more in terms of a complete banking relationship with cash management, deposits, and wealth management as well.

CLN: Where do you see the business in five years’ time? Our goal is to establish a brand equity and awareness centered around specialization to the hotel and restaurant sectors, a high level of capability in execution, and consistency throughout the cycle. We want to be the lender that takes the right swings with a value-creating product for the right operators, and brands that are growing. We expect to grow our book rapidly in a prudent and diligent manner over

the next few years. Solid credit quality comes from taking the time and effort to understand what is going on in the industry, from both a micro and macro perspective. We’ve got the right team, the right alignment under CWB, and we’re ready to provide accretive financing structures and products for restaurant and hotel operators across the country.

CWB’S CORE VALUES “Joining forces with the CWB Franchise Finance team was a big win for CWB in 2016 as we continue to deliver on our established commercial banking growth and geographic diversification strategy,” says Chris Fowler, CWB’s president and chief executive officer. “Our competitive strength has always been based on specialized industry knowledge and a targeted approach to niche markets, so it’s a great fit that allows us to expand our client offering. We’re also proud of our unique, award-winning culture that is based on putting people first, something that we also share with Ed and his team.”

www.cwbfranchise.com


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Profile for Ishcom Publications

Canadian Lodging News March 2017  

The March issue covers a variety of stories about the accommodations industry, including the future of brands for the HAC conference.

Canadian Lodging News March 2017  

The March issue covers a variety of stories about the accommodations industry, including the future of brands for the HAC conference.

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