STAY Magazine, Vol. 2. Issue 3

Canadian Hotels

A dramatic turnaround

Publisher

Big Picture New Media

Managing Editor

Stacey Newman stacey@staymagazine.ca

Advertising Sales

Stephanie Gadbois stephanie@staymagazine.ca

Produced & Creative Agency Boomerang Art & Design Inc. boomart.net

Contributors

Colliers Hotels, Jade Prévost-Manuel, Jim Byers, Allan Lynch, Jamie Thompson, Babak Taheri, Stacey Newman Subscription Inquiries

© Copyright 2022 All rights reserved. No part of this magazine may be reproduced without written permission of Big Picture New Media, the publisher.

STAY is published six times per year by Big Picture New Media (BPNM), a subsidiary of Big Picture Conferences. For 25 years, Big Picture has been hosting the Canadian Hotel Investment Conference (CHIC) and other go-to conferences and events for Canada’s hotel industry. Subscription price: $110 per year, most single issues $18.95.

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Editorial Advisory Board

Robin McLuskie Managing Director, Hotels, Colliers Hotels

Brian Leon Chief Executive O icer, Choice Hotels Canada

Brian Flood VP and Practice Leader, Hospitality and Gaming, Cushman & Wakefield

Scott Richer VP, Real Estate and Development (Canada), Hyatt Hotels

Ed Khediguian Senior VP, CWB Franchise Finance

Bill Stone President, Knightstone Hotel Group

Gunjan Kahlon VP Franchise Sales and Development, Wyndham Hotels & Resorts

Judy Sparkes-Giannou Co-Owner, Clayton Hospitality Inc.

Deborah Borotsik Senior VP, Beechwood Real Estate Advisors

Alan Perlis President, Knightstone Capital Management and CEO, Knightstone, Hotel Group

Alnoor Gulamani President, Bayview Hospitality Inc.

Christina Poon General Manager Hotel W New York – Union Square

Phil Thompson Business Lawyer

Sandra Kanegawa Owner, Heritage Inn Portfolio, X-Dream

Vogue Hotel Montreal Downtown, located in the city's elegant neighbourhood "the Golden Square Mile."

INNSIGHTS

We are people (not human capital)

By Stacey Newman Managing Editor

LEONARD MLODINOW is a theoretical physicist and author. He is recognized for groundbreaking discoveries in physics and for making science accessible. Mlodinow collaborated with the late Stephen Hawking, writing a New York Times bestselling book about the latest notions and physics and cosmology.

But where he diverges from these areas of expertise is where I became interested in Mlodinow, and it’s within this divergence of ideas where I think his theories are relevant to the Canadian hotel sector.

Leonard Mlodinow published Elastic: Flexible Thinking in a Time of Change in 2018, without any idea how prescient the concepts were therein. Within two years of the book’s release we were living through a modern-day plague; a phenomenon that has catalyzed the dismantling of the scaffolding of our societies.

Elastic “looks at the psychology and neuroscience of change, and at how tapping into elastic thinking can allow human beings to thrive in the modern world. Drawing on cutting-edge research, Mlodinow journeys through the mechanics of the human mind as we navigate rapidly changing landscapes around us.”

Elastic thinking “is the capacity to let go of comfortable ideas and become accustomed to ambiguity and contradiction; the capability to rise above conventional mindsets and to reframe the questions we ask; the ability to abandon our ingrained assumptions and open ourselves to new

paradigms; the propensity to rely on imagination as much as on logic and to generate and integrate a wide variety of ideas; and the willingness to experiment and be tolerant of failure.”

Where do elastic thinking and the business of hotels converge?

Mlodinow stated the following during an interview in 2018 with Scientific American about the importance of flexible thinking in business: “The failure of businesses to adapt has led to the quick demise of countless companies, and major power shifts in industries from taxis to hospitality. But we must adapt to thrive in our personal lives, too. We have to be willing to rise above conventional mindsets, to reframe the questions we ask, to be open to new paradigms. We have to rely as much on our imagination as on logic, and have the ability to generate and integrate a wide variety of ideas, to welcome experiment, and be tolerant of failure. I call that manner of thought elastic thinking, in contrast to rational or logical thought.

“Rational/logical thought is an analysis that can be described by an algorithm of the kind that computers follow. Elastic thought cannot. We evolved the capacity for the former in order to help us face the everyday challenges of life. We evolved the latter to help us succeed when circumstances change—which is why it is increasingly important to hone those skills today. Elastic thought is where

your new ideas come from. Imaginative, original, and non-linear, it is ‘bottom-up’ thinking, in which insights percolate into the mind, seemingly from nowhere.”

My elastic thoughts as an editor and outsider

I am certainly not a hotel sector expert. My areas of expertise are publishing, journalism, and photography, the majority of which have been focused on Canadian hospitality over the last decade. I’ll say again that the primary expertise I bring to this discussion is my ability to wrangle up the real experts and thought leaders around us. I am not an industry insider but a professional observer of industry; a fact that Mlodinow would probably argue positions me as an outsider to best observe and comment on the hotel sector.

The observations and opinions I make come from my time immersed in the hotel sector over the last couple of years and the broader hospitality industry over the last decade; through events like the Canadian Hotel Investment Conference (CHIC 2021 and 2022) and the Hotel Association of Canada Conference (HAC2022). I have gathered intel and formed opinions speaking with

those of you in the hotel sector who do the research and whose experience is far more vast and profound than mine.

Moderators, panelists and speakers at CHIC and HAC, you were compelling, inspiring and brilliant in general.

There were two speakers in particular whose words struck me as extraordinarily important—Susie Grynol, president and CEO of HAC; and Sébastien Bazin, chairman and CEO of Accor S.A. made some of the most stark and honest comments about where the hotel industry is at, globally, and in Canada. Both Grynol and Bazin, and their teams, have engaged in highly elastic thinking to understand the conditions plaguing the hotel sector.

The alarming truth is that the people aren’t alright. Permanent and temporary employees, suppliers and the local communities in which hotel operations reside have suffered, and oversights and injustices have piled up. There is a marked us-versus-them mentality in the bedrock of the food and hospitality industry’s business models, infrastructure and attitudes. These ideas and conditions have been dragged into the light because of the pandemic and by leaders like Grynol, and Bazin. Many others in the industry have also sounded the alarm; calling problems by name and instituting change. But it’s not easy, especially since some of the industry would still prefer to look the other way and focus on short-term gains.

The real bottomline is that industry can no longer choose to ignore, exploit, and in the worst cases, abuse the people in the sector. Why and how have we collectively de-empathized with the people whose lives intersect with our business interests? The answers to these questions lie at the epicentre of the seismic shifts occurring in the hotel sector in Canada and the world.

The pandemic was both macro- and microscope

Over the last two years, we have lived through massive global disruption, affecting individuals and institutions alike. The disruption of the past 25 months has

Susie Grynol president and CEO of HAC

Sébastien Bazin, chairman and CEO of Accor S.A.

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Candlewood Suites® Kingston West

Holiday Inn® and Suites Calgary South - Conference Center

necessitated a difficult and candid look at our lives, societies, governments and industrial pursuits.

Sébastien Bazin gave the closing keynote at CHIC 2022. The keynote was interview format; Bazin was asked questions by moderator, Eric Plesman, the head of global real estate at the Healthcare of Ontario Pension Plan. Plesman started things off by returning Bazin to the beginning of the pandemic.

March 22, 2020, Bazin was in his office when upon learning of the speed of the epidemic spreading across Europe, he sent WhatsApp emails to Accor’s country heads with clear instructions to close all Accor Hotels. Bazin described it as “the worst ever decision I’ve made in my life. When you do this, there’s only one thing I was thinking at the time, and I guess it was maybe the right decision and the wise decision, but I knew that this was extremely unfair and extremely impactful on 280,000 people.” He was referring to Accor’s employees around the world.

Bazin seemed to understand at that time what so many didn’t—Accor employees

working at properties in developing nations and those under harsh governmental control would not be subsidized. The employees being furloughed in these countries would be utterly devastated by the necessary closing of hotels. “In America and Europe, we were being blessed by so many state-owned funds, but…we happen to be the largest, by far, operator in South America, Chile, Peru, Colombia, Southeast Asia, Vietnam, Laos, Cambodia, Thailand and the largest in Sub-Saharan Africa. In all those countries, believe me, there were no subsidies available from those governments. I knew that probably a third of our employees would not get a paycheck,” said Bazin. Even worse, he said, was his realization that those employees subsequently would not be able to afford healthcare if they became ill.

Around the same time, Bazin and his board were due in discussions about the payment of dividends for the company’s 2019 performances. Bazin couldn’t fathom paying dividends to shareholders after the decision to close their hotels. So, he asked not only that the dividends not be paid, but that the board would instead form a foundation that would be responsible for realizing access to food and healthcare for furloughed employees in need. The foundation was named ALL Heartist and over the past 25 months, over 35 million Euros have been given to over 125,000 employees, mostly across Asia-Pacific and South American communities.

This was empathy in action. But it was also shame—Bazin talked about feeling ashamed. Four years before the pandemic, he had devised a plan for a concept he’d named “Accor Local.” He said the plan had failed “miserably.” Why? Because he had ignored the people at the very heart

of his operations—the local communities supporting Accor operations.

“I was thinking how foolish the hospitality players have been for the last 10 to 15 years. The population on this planet is 7.5 billion people, plus. All of us have been catering to 1.5 billion people who are travellers, which is great because it’s been a great business for us. But we left aside probably another 2.5 billion at a minimum of the non-travellers, the local community. We have enormously expensive real estate in the middle of so many cities on this planet and we do not know [the] local community,” said Bazin.

There are only three places on this planet truly open 24 hours a day, seven days a week: Hospitals, police stations, and hotels. Bazin was pleading for understanding. In the world of today, one would think that hotel players should be of service to hundreds of millions of people and cater to them, he stated.

He had tried it four years ago and failed miserably because nobody wanted to deploy it. “Now, for different reasons, out of the pandemic, it’s finally working and it’s working fast.” Bazin believes that there is no longer any excuse for employers, private equity, owners, or operators to ignore the very people they should be supporting. Bazin made an example of himself and Accor’s trials and tribulations as agents of change for the greater good. He spoke with the conviction of someone whose perspective is forever changed. Bazin challenged every actor in the hotel sector, every executive, and every owner to do better and share the wealth. Are we listening? Have we learned anything? Do we care?

Unfailing, unflinching advocacy for Canadian hotels and workers

Susie Grynol, CEO and president of the Hotel Association of Canada (HAC), and her team at HAC have borne the unenviable burden of securing subsidies for one of the country’s hardest-hit sectors while lobbying governments—federal, provincial, territorial—for protections for both hotel businesses and employees. Any one of these advocacy projects would alone be monumentally challenging. Grynol has led the charge across the front lines of the multiple battles that Canadian hotels have been engaged in like keeping borders open, growing the tourism sector, addressing the labour shortage and immigration barriers, as well as broad-issue lobbying such as developing a multilateral tax framework for digital service providers. The team at HAC has fought, tirelessly and at times thanklessly for policy, legislation and funding that directly benefits Canadian hoteliers, employees and the whole industry.

And

HAC has won, battle after battle.

The HAC Conference 2022 took place on May 3rd. The conference represented a return to in-person attendance; with speakers and plenary sessions that didn’t pull punches. This was a conference that not only celebrated the re-gathering of industry friends, but moreover, it served as a call to action for stakeholders in Canada’s hotel sector. Grynol addressed the audience several times throughout the program; unapologetically commanding attendees to look more honestly at the sector. To remove bias, stop spectating and start participating in advocacy campaigns.

Grynol, like Bazin, spoke candidly and firmly, offering up her experiences

throughout the pandemic and sharing her tales of relentless perseverance which allowed HAC to achieve so many of its advocacy milestones. Grynol and team have raised the profile and the voices of Canada’s hotels, ensuring the hotel segment would be visible rather than couched in policies and legislation for the broader “hospitality” industry.

Following are some of the top objectives met by HAC over the last two years:

- Wage subsidies

- Fixed cost support

- Access to liquidity

- Sector-specific support

- Fair tax

- Open border

- Improvements to the Temporary Foreign Worker (TFW) program

Looking forward, some of HAC’s objectives include:

- Maintaining an open travel environment with a fully open border, better border management strategies, changing the travel narrative i.e. “Canada is open for business,” and a return to work.

- Building a robust labour force by maximizing access to workers through existing programs as well as developing a tourism sector labour strategy.

- Ensuring fair competition by supporting provinces on emerging STR regulations and developing an updated national short-term rental strategy.

The 2022 HAC Conference recordings are available for viewing at www.hacconference.ca/2022/Recordings

The

work is

not

over Sébastien Bazin acknowledged that he doesn’t necessarily like the word “hospitality.” He insisted, that instead of relying on old-world ideas and conventions, we need to break the code. We need to think differently. We need to act now, with empathy, understanding and courage. You might say that he agrees with Leonard Mlodinow’s theories that only the most elastic of thinking will save us in the hotel sector, in industry, and as a species. Of the employees who are not returning to the hotel sector Bazin stated: “The reason why they’re not back is because, for two years, they had time to measure the price of their sacrifices.”

Think about that.

He then offered, perhaps more optimistically: “The world of tomorrow, it will be better, it’s going to be a different world, so you might as well embrace it and love it.”

We are people, not human capital, not commodities. We can build a better industry and a better world, one elastic thought at a time.

Get involved today at www.hotelassociation.ca

The Hotel Association of Canada 2022 board of directors

The Hotel Association of Canada (HAC) has appointed Sara Glenn, chief operating o icer, Canada, Caribbean, Mexico, and Central America at Accor North America as chairwoman of the board.

“The Hotel Association of Canada has been critical to the survival of Canada’s hotel industry over the past two years, and I am honoured to serve as chair. I am looking forward to working with our board, the HAC team and our members to ensure our industry realizes a full recovery and a return to pre-pandemic growth,” said Glenn. She succeeds Jonathan Lund, regional vice president, hotel operations, Intercontinental Hotels Group (IHG).

“I would like to thank Jonathan for his exceptional leadership and service as chair throughout the COVID-19 pandemic. His guidance and support were key to HAC’s success over the past two years,” said Susie Grynol, president and CEO, HAC.

Joining the board are Mark Kochhar, Hilton Worldwide; Satinder Dhillon, Innvest Hotels LP; R Gordon Johnson, Atlific Hotels & Resorts; and Bill Stone, Knightstone Hotel Group Inc. Re-elected for a second three-year term are Scott Jocelyn, Manitoba Hotel Association; Tony Elenis, Ontario Restaurant Hotel & Motel Association; Robert Pratt, Sandman Hotels, Inns & Resorts; Marc Stanilo , Superior Lodging Corp, and Brian Leon, Choice Hotels Canada.

THE HOTEL ASSOCIATION OF CANADA’S 2022 BOARD OF DIRECTORS INCLUDES:

Provincial Associations:

David Clark, general manager, Atlantica Hotel Halifax (Hotel Association of Nova Scotia)

Tony Elenis, president and CEO, Ontario Restaurant, Hotel & Motel Association

Ingrid Jarrett, president and CEO, British Columbia Hotel Association

Scott Jocelyn, president and CEO, Manitoba Hotel Association

Véronyque Tremblay, président-directrice générale, Association Hôtellerie Québec

Steven Watters, representative, Alberta Hotel & Lodging Association (corporate director, operations, Nova Hotels)

Corporate Brands:

Sara Glenn, chief operating o icer, Canada, Caribbean, Mexico, and Central America, Accor North America

Kevin Brickner, senior vice president, franchise sales and development, Wyndham Hotels & Resorts

Mark Kochhar, director, owner relations, Canada, Hilton Worldwide

Brian Leon, president, Choice Hotels Canada

Ally Wesson, vice president marketing, Realstar Hospitality

Roz Winegrad, AVP, Owner and Franchise Services, Marriott of Canada

Management Companies:

Tony Cohen, executive vice president and partner, Crescent Hotels & Resorts Canada

R Gordon Johnson, vice president, operations, Atlific Hotels

Will Loughran, president, Evolution Hospitality (Aimbridge Hospitality)

Ownership Companies:

Satinder Dhillon, senior vice president, operations, InnVest Hotels LP

Mandy Farmer, president and CEO, Accent Inns|Hotel Zed

Melissa French, vice president operations, Silver Hotel Group

Robert Pratt, president and CEO, Sandman & Sutton Place Hotels

Marc Stanilo , president and CEO, Superior Lodging Corp.

Directors-at-Large:

Jonathan Lund, regional vice president, hotel operations, Intercontinental Hotels Group

Bill Stone, president, Knightstone Hotel Group Inc.

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CLIMBING OUT OF THE PANDEMIC TOURISM HOLE

By Jim Byers

Canadian cities are beginning to recover from more than two years of a terrible tourism drought.

Destination Vancouver says March 2022 occupancy was 65 per cent in the city, up substantially from 40 per cent in March of 2021.

“We’re definitely seeing pick-up,” said Destination Vancouver's Sabrina Tey. “Looking ahead to the next six months, hotel bookings are up over 300 per cent compared to same time last year.

“Tourism is coming back.”

Canadian hotels as a whole had only about 30 per cent occupancy in March of last year; Scott Beck, president and CEO of Destination Toronto, tells me that Toronto was at 60 per cent hotel occupancy last month.

Beck said it’s a big step, and that he’s “guardedly optimistic” about the next few months. But he said business travel, particularly international business travel, has been slow to rebound.

“We’re getting a good deal of leisure travel, as well

as Canadian corporate and Canadian associations,” he said. But the big international conferences haven’t returned yet, and those are critical for the city’s economy.

Andrew Weir, executive vice president destination development for Destination Toronto, said hotel occupancy over four April weekends had averaged roughly 70 per cent.

“That is still below normal (pre-pandemic) levels but clearly a significant rebound for weekend leisure travel. However, the big caveat is that recovery so far has largely been driven by leisure travel, and still highly regional and local. For a major urban centre like Toronto, we depend almost equally on leisure and business travel and business travel remains well behind.

“Smaller meetings are starting to return but the larger ones take longer given the booking cycles. Transient business travel also remains in a very gradual recovery as many companies have not fully resumed business travel. So, there are positive signs,

but at the same time those periods of greater travel can mask some of the persistent gaps in business and international travel Weir said.

Hotel booking numbers weren’t available, but Calgary Tourism says travel-related searches from the U.S. are up roughly 67 per cent from a year ago.

For Ottawa, U.S. room night bookings for May to December of this year are 400 per cent higher than last year. The vast majority of those are for the summer months, when leisure travel (as opposed to business travel) is usually strongest. Of course, the Canadian border was effectively closed to U.S. visitors in 2021.

The Canada Border Service Agency (CBSA) recently announced that more than 1 million travellers were admitted into the country during the week of April 11. Still, visitor numbers are down about 44 per cent from the the same 2019 period.

NUMBERS TELL THE STORY

Americans are feeling more confident about travel, and 2 in 5 are likely to take a trip to Canada this year

6/10

Americans agree that Canada is safe to visit, but 37% agree that there are COVID-19 health concerns that would prevent them from travelling to Canada

New research from Destination Canada paints a pretty good picture for summer tourism north of the border, but there are still concerns about COVID-19 and fuel costs

Compared to December of last year, Americans' confidence to travel has increased significantly, with 56% saying that they are confident that they can travel safely in the current environment. In December that figure was just 38%

Asked where they’ll be heading in Canada, 28% to Ontario

21% to British Columbia

21% to Quebec.

10% to Alberta

11% to Nova Scotia & PEI

38% of Americans indicate that they are likely to travel to Canada sometime between April to December 2022, with 21% likely to travel during the summer months of July to August and 14% during the fall months of September to November

A little less than one-half of Americans (43%) agree that transport costs (e.g., flight or fuel costs) are a consideration that would prevent them from travelling to Canada

More than one-half (56%) of Americans agree that Canada is easy to travel to, but 44% agree that there are COVID-19 border restrictions or hassles that would prevent them from travelling to Canada. That might be concerning, but the study took place March 15-23, prior to Canada lifting its requirement for pre-arrival COVID testing

SNAPSHOT

CANADA Q1 2022: COLLIERS HOTELS

27 # OF Q1 DEALS Q1

$194M

TRANSACTION VOLUME

The largest transaction in Q1 was the TownePlace Suites Belleville, ON for $20M ($209,000 per key)

Q1 2022 Transaction

Volume by Sale Type

Just under 50% of transaction volume took place in Ontario with the balance predominantly split between British Columbia and Alberta

Hotel $126M | 65%

75% of transaction volume and nearly 90% of deals were either limited-service or motel positioned properties

Alternate Use

$44M | 23%

Redevelopment

$24M | 12%

Highlights

• Lodging investment was fairly muted in the first quarter which saw approximately 27 deals totalling $194 million in volume. Pricing remained healthy overall with an average price per key of $130,900. When excluding transactions acquired for alternate uses, price per key was $119,400.

• Lower than anticipated volume was largely a reflection of the product that traded, primarily motels and limitedservice properties outside of major markets with an average deal size of $7.2 million and 55 rooms.

• Acquisitions for conversion to alternate use continue to comprise an above-average component of trading activity with renewed momentum from additional funding allocated to the Rapid Housing Initiative, among other programs.

• Despite a slow start, the deal pipeline for the second quarter and back half of 2022 is encouraging including a handful of more significant full-service city centre hotels expected to transact.

• Looking ahead, investment activity should be supported by the continued year-over-year improvement in hotel operating performance and increasingly available hotel financing, albeit at increasing costs as the interest rate environment shifts.

Operational Update: busy summer travel season ahead

• The most recent Smith Travel Research data points to quickly rebounding operating metrics with many cities and segments approaching near normal or surpassing the comparable period in 2019.

• Real-time demand post-Easter weekend has been strong with many cities enjoying robust occupancies, particularly over weekend periods.

• Domestic travel demand should more than make up for the loss in foreign visitors over the peak travel season that is now kicking into gear.

• There is a good possibility that the overall market will fully recover on a RevPAR basis sooner than expected – largely attributed to strength in growing ADRs.

Canada's Improving RevPAR Environment

Canada's national RevPAR metrics posted notable month over month improvement in Q1

While downtown markets continued to operate well-below normal, March RevPAR metrics in leisure-focused markets such as Victoria and Banff ran more than 20 per cent above the same period in 2019, pointing towards a strong rebound for the summer season ahead.

Q1 2022

Source: STR

INTELLIGENCE

Footnotes:

(1) Hotel acquired as a portfolio with three other commercial buildings in Edmonton for $19 million.

(2) Hotel situated on a large 4.36-acre site with a liquor store. Sale details confidential.

(3) Acquired for conversion to alternate use.

(4) Sale details confidential.

(5) Acquired for redevelopment.

(7) Part of a portfolio including two hotels and two retail buildings acquired for eventual partial redevelopment. Hotel allocations not available.

(6) Acquired as part of a larger portfolio. Sale details confidential.

Note: Trends are based on hotel transactions of at least $1 million.

(Source: Colliers Hotels)

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A DRAMATIC

TURN AROUND

IS TAKING PLACE FOR CANADIAN HOTELS

By Jim Byers

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

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

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

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

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

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

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

“There’s a lot of pent-up demand for that. So that’s coming back. Our booking pace for the second half of this year and

Perspectives from Don Cleary, president, Marriott Hotels Canada

CUSTOMERS ARE CONFIDENT THAT IT’S SAFE TO GET BACK TO THEIR FORMER TRAVEL HABITS

future years looks pretty good. We’re very encouraged there. The big, large conventions aren’t back yet, and we need to get those back. Until they come back the cities won’t get back to pre-pandemic levels.”

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

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

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

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

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

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

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

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

How fast Canada rebounds “is really dependent on the virus, that we don’t have significant spikes, and, more

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

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

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

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

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

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

“The industry has called it revenge travel,” Cleary laughed. “Luxury is doing extremely well. That’s especially true in

our warm weather resorts in the US. Last year and this year I think are the strongest years they’ve ever had. In Canada, there’s not as many warm weather resorts but you do have places like this, The St. Regis Toronto, the W in Montréal. Those hotels, they’re urban, but they’ve enjoyed some staycations.

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

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

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

Cleary said Marriott is growing in existing markets “and growing in what I’d call secondary tertiary markets with some of our mid-scale hotels, such as Fairfield and

TownePlace Suites. The last few years we realized we could grow those more aggressively.”

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

“The Muir, in my opinion, maybe the finest hotel in the entire Maritimes,” he said. Another Marriott Autograph property is the Humaniti hotel in Montréal. The Dorian will be another Autograph Collection hotel when it opens in Calgary this summer. Cleary said it will have a “spectacular” rooftop restaurant.

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

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

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

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

“I don’t think we took it up a tier. I think what we did is focus on its core strengths. For instance, it’s always been THE

The Dorian by Marriott Autograph

REVENGE TRAVEL

gathering place in the cities it’s been in for generations. So, we have a big focus on the lobbies, you’ll notice. We want this to be the gathering place for customers and the community We wanted to do a very nice, e icient room product.”

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

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

Cleary said changes to the foreign worker

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

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

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

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

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

Mark Kay

Achieving balance in the first half of 2022

By Stacey Newman

MARK KAY is the principal broker and president of CFO Capital, which he has owned since 2004. In that time, CFO Capital has financed billions of dollars in commercial mortgage projects.

Kay’s expertise in strategic debt structuring spans every asset class including multi-residential, student housing, hotel and resort, retail, office, medical, and single-purpose properties for both construction and term financing. He has established a large network of commercial mortgage lenders and industry professionals to form a global team.

Before 2004, Kay worked in commercial real estate at the Business Development Bank of Canada, specifically focusing on owner users, investment properties, management buy-outs and company acquisitions. He is a graduate of the University of Toronto having completed a double major honours in finance and economics

I caught up with Mark Kay at the Canadian Hotel Investment Conference (CHIC 2022) to talk about his thoughts on the state of the industry, defining liquidity and igniting growth in a post-pandemic hotel landscape.

Q: You’re a prolific writer, sometimes providing weekly educational blasts via email and news releases. Your narrative voice is pretty direct and diverse; is this intentional, and if so, why?

A: The idea of weekly marketing is to educate the market about the debt structure for certain types of assets that are available. In the lending world, the demand for capital is always there, but for the institutions, they’re always changing what they’re interested in on a quarterly basis. The banks and institutions are balancing their portfolios.

And then also in the world of leverage, there’s more and more mix, more investment corps, private capital is reinventing itself, new things are coming to the market to provide more leverage. And more leverage is more liquidity.

We want to be proactive to the demands of the market. Therefore, if you look at preCOVID, hospitality was in big demand. Everybody was getting into hospitality. There are a lot of new entrants, people switching from di erent industries were getting into hotels and institutions were very accepting. And there were more institutions lending pre-COVID in the last 20 years.

When COVID hit, two-thirds of the institutions had a moratorium on hotel lending, one-third were still lending “selectively” with new underwriting parameters.

As the market is accepting COVID in everyday life, hotels are back in business and so are about 90 per cent of the lenders. As such, we’re trying to react to the demand of the client. If they’re looking for capital to build a hotel, for example, and the market’s slowly coming back, to me, that’s an industry leader, right?

They’re saying, “Hey, we want the capital, now we’re back.” The institutions are stating, “It is available. We’re working with our consultants, the appraisers to make sure it’s feasible.”

So, we’re ensuring that we are educating the institutions as to where the demand generators are.

Q: How would you describe in simple terms what has transpired over the last couple of years?

A: What has transpired over the last couple of years, is that there’s been a surge in residential apartment demand by the consumer supported by the

government programs, and our lenders are supporting with creative leverage debt structures for both construction and term.

The industrial sector is also very hot due to minimal vacancy which translated into higher rents, higher values and minimal product. Hence, lenders are very supportive of providing debt financing for both construction and term.

Q: Housing has dominated the real estate narrative, is this a ecting the hotel side?

A: With pricing going up, there’s a big demand for housing. There’s not enough supply for housing and people are getting priced out of the market. And therefore, the government is supporting the a ordable housing side, and they’re having initiatives with CMHC to promote and to support that sector, in both the urban, secondary and tertiary markets across Canada. With that being said, other institutions have been proactive, and besides CMHC, have been providing up to 85, 90 per cent construction, institutional, and non-insured, to support this demand. So now there has been a big focus on the development. We’re seeing condo developers moving into the space. We’re seeing hoteliers moving into the space, which is great to see.

Q: And the industrial side?

A: If we look at the industrial market, preCOVID for the last 30 years, it has shown marginal growth in rental rates.

"...our lenders are supporting with creative leverage debt structures for both construction and term. The industrial sector is also very hot due to minimal vacancy which translated into higher rents, higher values and minimal product."

In the last couple of years, rental rates have tripled, and vacancy is now 0.5 to one per cent. And therefore, valuations and acquisitions have tripled, because— no vacancy. So institutions have reacted to that and also come together to provide 85 to 90 per cent of the construction costs and acquisition costs to support this growth. And people look at that and say, “Well, is that a risk factor?” It’s not a risk factor right now, because the vacancy you’re sitting at one or 1.5 per cent, that range. in case of a default, it’s still liquid to sell in that market. That’s what’s transpired in the last couple of years as well.

Some of the contributors that moved the market would include the Amazons of the world, the logistics corps of the world, warehousing, and we’re seeing that continue. There’s been a movement toward industrial development in the last six months due to the lack of supply of product.

Q: There is always an educational piece to the information you share. Is this part of who you are as a person, as a professional, or as an institution?

A: My rationale: It’s important to educate the market on what debt strategies are available as the source of capital changes daily. Our philosophy is that we want to provide a consistent flow of capital at any given time. So, it’s important to educate the market on what’s available at the same time.

People are thinking, “Can I get into this space to develop, can I a ord to acquire this asset? What are my debt options?”

And they’re usually just dealing with their own bank and focusing on their lending policy. The reality is, there are a hundred more debt options than you actually have, than what you’re aware of.

Our role is to say, “Forget about, ‘can you get approved?' And instead, ask for customized debt strategies that will work for you.” If you are a developer that has a vision of rapid growth, then you require higher ratio debt financing to make sure your equity is su icient for all projects. If you’re sitting on a lot of cash, then you don’t want the high ratio. You’re focusing on a lower rate and lower leverage. there’s a debt market for everybody. And our role is to understand what lenders/debt structures are available at any given time.

Q: You’re challenging clients to take agency over their ambitions?

A: Correct.

Q: What do the next six months look like for you and your business?

A: We are growing. My background is in commercial banking. And we are looking at growing even further by hiring former real estate bankers, or current real estate bankers, who understand how to structure debt, share the same vision, educate them on the product line, and continue that growth. There’s a lot of capital available, and a lot of liquidity, irrespective of the inflation and the rise in the rates. There’s still a big demand for construction and acquisitions.

The cost of construction relative to the viability of a project is a very important topic for discussion for several asset classes—because the cost of construction has gone up within the supply chain, inflation, etc., and some projects just aren’t as viable in a couple of industry sectors.

You may have seen a few condo projects that had to pull back the sales. They’re getting a lot of heat, but the rationale is, that the margin has now diminished. So how do you start a project with no margin going into it?

I think there’s going to be some sort of equilibrium that has to take place with the rise in inflation. And the rise in rates is healthy for the economy right now. We need to pull things back a little to achieve balance.

"What are my debt options?”

And they’re usually just dealing with their own bank and focusing on their lending policy. The reality is, there are a hundred more debt options than you actually have, than what you’re aware of."

as the economy and travel come back from the pandemic are hotels ready to work the meetings sector? Meetings/business events account for 30-40 percent of a fullservice property’s business. Yet hotel websites do not serve meeting planners well.

Brenda Howes, founder and CEO of The Howes Group, a site selection company, is turned o by the corporate sameness which makes many hotel websites generic. While brands may see this as delivering a message on service and amenity consistency, the buyer finds the sameness confusing, making it di icult to di erentiate and qualify properties. In a way it’s like reading a stack of resumes. Every job applicant delivers the same information in the same format, so only the bad stand out.

Hoteliers and o -site venues have become so sophisticated in their o erings they seemingly don’t realize the ongoing digital dilemma is more basic. It’s the failure of supplier websites to provide useful—and accurate—information.

A shocking number of websites are inaccurate, lack essential information (like number of bedrooms), are hard to navigate (with meeting

information hidden under weddings which in a good year might account for 5 per cent of business) and overlook local amenities which could help spur interest in a particular property. The lack of information about bedroom counts is an issue that planners continually raise. This was amplified during a nationwide meeting project, where, to qualify suppliers, I, like planners, went online to tire kick to see if properties met certain group criteria. For that national project, I clicked through 128 Canadian websites. Only 11 had information I could trust.

There’s a staggering amount of inconsistency in destination and property facts. Some of the contradictions arise from refurbishments and renovations. For example, a property redevelops existing F&B into a new concept café or restaurant. The décor, menu and name change. That information is added to the site. However, the

Hospitality’s digital dilemma

By Allan Lynch

Hotel websites do not serve meeting planners well.

previous restaurant or service isn’t removed or lurks on secondary pages, leaving the impression the property has double the F&B options than exist.

This is so prevalent

it has a name:

amenity confusion

This is an industry issue. On a pre-pandemic site inspection for a 2,800-room U.S. property the sales director said they had 725,000 sq. ft. of meeting and event space. However, the press kit fact sheet listed “600,000 sq. ft. of flexible meeting convention, exhibit and pre-function space.” The property’s website listed 757,478 sq. ft., while their destination marketing organization’s site showed “more than 700,000 square feet.” CVent listed their total meeting space as “>100,000 sq. ft.” None of their digital or print literature mentioned the 290,000 sq. ft. in an adjacent building.

As for F&B outlets, the property fact sheet listed 17 restaurants and lounges on-site, while a glossy resort guide listed 13 on one page, and 19 on another. The website said 15. So many numbers, so much inconsistency.

The biggest annoyance for meeting planners is trying to find bedroom counts. In a recent quick click of 15 Vancouver, Toronto, Montreal and Halifax properties with 4-to-5-star ratings; only five provided a bedroom count. Five others provided detailed lists of their specific room categories and amenities, but no indication of the number of rooms and suites available. So, 60 per cent of leading properties failed to include this basic detail in general property information or in their meetings information.

The FIT market may not care about room counts, but meeting planners and incentive houses do. They need to know if a property is large enough to accommodate their event or if it’s so big their group can become lost in the crowd.

When we get into specifics about meeting space, something is lost in the descriptions. Traditionally, properties had ballrooms, meetings rooms and breakout

rooms on offer. Now many properties are freshening up their descriptions to include “event rooms.” This follows the meetings industry evolution from conferences and conventions to “business events.” But the use of “events” and “meeting” room descriptions can add to the confusion. For example, a Toronto hotel says it has 33 meeting rooms, then references its 32 event rooms. Do they have 32, 33 or 65 rooms?

Another property’s website says, “we have 25 event rooms split over three levels,” but the very next line lists “15 meeting rooms.” What’s the difference between an event and a meeting room to cause this 10-room difference? Do they mean they have 15 rooms which are dividable into 25 rooms or do they have 40 rooms (25 + 15)? Are meeting rooms the former breakout rooms? Such distinctions are important to planners.

Trade show set ups are important, but not listed on hotel capacity charts. Nor are details about loading docks and service areas. Is there a special entry for booths and show materials or do they come through the lobby and utilize guest elevators? Many events can’t exist without trade show revenue, so this is of significant interest to planners.

Another frustration are floor plans. Planners need to visualize event flow. Not every property posts a floor plan on their website. Several of the properties which did provided a plan for only one floor when their actual meeting space was contained on two or three floors.

Cynics accuse salespeople with “selling the sizzle,” but as Canadians we appear more often to undersell. One resort rep said they excluded a third of their largest

room’s square footage because it was “an awkward layout.” They also didn’t mention the availability of tenting their terrace. Another venue didn’t list foyers because “they are hallways,” which overlooks their potential as saleable space for registrations, pre-events and cocktails.

In a LinkedIn discussion on the unreliability of hotel capacity charts, the VP of a management services company said he cuts capacity by 25 per cent. “For some reason most hotels are completely incapable of measuring the dimensions of their rooms accurately.” A hotelier responded, “Capacity charts are not intended to be a stand-alone tool. These charts are used as a point of reference, but more importantly to have people engage in a conversation about the event.”

The idea of capacity charts—or a lack of other property details—being a place from which to start a conversation is a passé concept illustrating the disconnect between seller and buyer. Planners are too time-pressed. They could be pulling together a client proposal from the road, in the evening, on a weekend or from another time zone. They don’t have time or the inclination to call a property when all they need is your bedroom count. They specifically don’t want to engage in any conversation with anyone they can’t first qualify.

The website fix is not expensive. It doesn’t require a redesign. It’s a few hours to audit property information and presentation. And to compare those details with collateral materials. It’s the cheapest investment a property can make.

fast fixes

to be relevant to the professional meeting planners and incentive houses who make up a significant revenue source:

Add a bedroom count. Planners and incentive houses need to know you can accommodate their event.

Check your details. How many F&B outlets do you actually have on-site?

Do your math How many meeting/event spaces have you? How can they be configured for various uses? It doesn’t make sense that a theatre and banquet set up have the same capacity.

Planners want to see your property’s curb appeal. Post an exterior shot to your site.

If your accommodation information shows a bedroom view, planners want to see the views from different sides of the property (water, city, park, mountain). Planners need to be prepared for delegates who feel slighted if they don’t have the perceived premium view.

Most properties aren’t a fortress, what’s the neighbourhood like? What’s nearby? Are you within walking distance to an entertainment or shopping district, to a unique venue or convention centre? Mention it. Groups often need some off-site event or option – don’t see that as losing business, consider it a sales tool to help win the RFP. Walkable off-sites saves hiring a coach and no delegate ever mentions how much they enjoyed the bus trip.

Don’t hide meetings under weddings. Meetings represent 6x to 8x the revenue of weddings—show it, and planners, respect. Planners have spent 30 years developing and earning professional accreditation and credentials to distance themselves from the concept they’re merely party planners. They’re ROI-driven professionals who want to be seen as such.

Speaking of weddings, on a site-inspection don’t tell a planner how brides like a room set-up. Have a real contact name or department email. Planners fear anonymous forms are a digital black hole where requests are lost, ignored or not treated with suitable immediacy. Business events are about relationships, which can start with your website. Make it work for your property.

Want to build a more inclusive hospitality business? Start with the bathroom

By Jade Prévost-Manuel

IN WINNIPEG'S vibrant West Broadway neighbourhood, The Tallest Poppy serves up food, drinks, and good vibes to visitors and locals of the Manitoban capital. The restaurant is known around the block for its eclectic roster of events, its welcoming atmosphere and—believe it or not—its bathrooms.

Owner Talia Syrie says that her business has o ered its customers gender-neutral washrooms for over a decade, though that decision arrived from rather serendipitous beginnings. It was a bathroom malfunction, she recalls, in the early days of the Winnipeg restaurant's operations that prompted them to downsize from two bathrooms to one.

"One of our bathrooms broke, and we couldn't a ord to fix it […] so we decided to just operate with one bathroom," she says. "Suddenly, a bunch of people reached out to us and were like, 'Thank you so much for doing this, this is so great,' and that's when we realized this was something that people wanted and needed."

Most Canadians don't think twice about leaving their cozy corner booths to use the bathroom. But for many, bathroom doors can be barriers—choosing which one to enter can feel like a nightmare.

Around the world, gender-neutral bathrooms are becoming more commonplace in a variety of settings. Hotels and restaurants are opting to take down the skirt- or pant-wearing stick figures tacked up to their establishments’ doors to make bathrooms welcoming places for people of all genders.

James Rilett is the vice president of Central Canada for Restaurants Canada, a member-driven organization that informs its restaurant members of government policies, industry research and trends, provides opportunities for training, and represents them through advocacy.

Rilett says that in the past, municipal bylaws required restaurants of a certain capacity to have separate male and female washrooms, e ectively prohibiting

gender-neutral bathrooms. The same went for building requirements that dictated establishments would need gender-segregated bathrooms if they exceeded a certain capacity.

"All of the [municipalities] that I'm aware of have gotten rid of [those bylaws]," says Rilett, whose advocacy work with the organization included getting municipal bylaws changed for members who wanted to install gender-neutral washrooms in their restaurants.

"But with planning, it's hard sometimes to break out of old habits, and if people are planning [for hotels or restaurants] how they always did, they might still [separate their bathrooms]."

At its new location on Sherbrook Street in West Broadway, which it moved into around 2014, The Tallest Poppy has two gender-neutral washrooms—a twostall bathroom and a single-occupancy bathroom, the latter of which offers people more privacy if they feel they need it. In that same vein, patrons who feel uncomfortable using a unisex, twostall bathroom can wait for the single occupancy room.

"We've always gone in with the idea of, well, if we can't make everybody

comfortable, we'll make everybody equally uncomfortable," says Syrie. "And I mean, you just have to decide what your priorities are and ask yourself, 'Who is it important for me to accommodate?'"

Using a single-sex washroom is more than just an uncomfortable experience for transgender or non-binary people. For Jordan Aird, a Bay City, Michigan, healthcare worker with family in Toronto, it can compromise their safety.

"As someone who was afraid of security getting called on them just for using a toilet, safe spaces matter," says Aird, who is queer and non-binary.

Aird recalls a time when they were stopped outside a women's bathroom—the space they choose to use when single-stall, gender-neutral bathrooms are unavailable— on the drive up to Toronto from Detroit.

"Being stopped and told some variant of 'Sir, that's the ladies,' on numerous occasions, was honestly disheartening," says Aird. "As a non-binary person who usually only has two options, it's not like I have much choice in the matter, and for me, a men's washroom would feel more unsafe."

Aird says that, for the most part, their experiences in Toronto bars, restaurants,

and public spaces were positive, and the people and businesses they encountered were accepting of non-binary customers. They add, however, that most of their positive experiences have come from visiting restaurants and establishments that the LGBTQ+ community has either built or run.

Providing accepting and, most importantly, safe spaces in Syrie’s Winnipeg restaurant was a no-brainer as a service industry business, the entrepreneur says because The Tallest Poppy is more than just a place where its customers can order food and cocktails. Syrie says that being a service provider means providing a well-rounded, enjoyable experience for patrons and adapting to the needs of not only her customers but also her staff, many of whom are trans.

"It makes them feel good and comfortable working at the restaurant because they know we've always made a safe place for them," says Syrie.

Creating unisex bathrooms in an establishment may not be rocket science, but there are several ways that business owners can adapt their spaces to better accommodate nonbinary and trans patrons. Creating a single, common area for sinks and mirrors not only reduces the all-toocommon long line for the women's washroom but also creates a shared space where everyone is welcome, regardless of gender. Removing gendered signs and creating signage that shows people what they might find within a bathroom—whether it be toilet stalls, urinals, or baby-changing stations—can

Winnipeg's The Tallest Poppy has two gender-neutral washrooms—a two-stall bathroom and a singleoccupancy bathroom

prevent confusion and help people decide which spaces they want to use.

Syrie says that if money were not an object, The Tallest Poppy would go down the route that a lot of new restaurants have taken and build a fleet of single-occupancy bathrooms. A cheaper alternative is installing floor-toceiling doors and dividers in multi-stall bathrooms to give people more privacy and protection.

In 2017, online review company Yelp announced that it would add a genderneutral restrooms category—specific to locking, single-stall toilet facilities that anyone can use—for businesses and customers to include on its platform's listings. Letting non-binary and trans patrons know that they're welcome at a business before they even walk in the door can provide them with a more positive and inclusive customer experience. It’s a recommendation that The Tallest Poppy follows—it advertises its gender-neutral washrooms on its website.

There are a lot of things that businesses can do to make non-binary and trans people feel welcome in their establishments. But building inclusive spaces begins with practising what you preach, says Aird.

Instead of feeling the need to point out which toilet someone is trying to use, business owners and customers should assume the person knows which room they’re walking into because at the end of the day, Aird says, people like them aren't mythical creatures—they're just trying to go about their days. "There's more to running an inclusive business than just signage," they say. "It's the culture you create."

Filling gaps in gender diversity data in Canada

CANADA is the first country to provide census data on transgender and non-binary people.

One in 300 people in Canada aged 15 and older are transgender or non-binary—of the nearly 30.5 million people in Canada aged 15 and older living in a private household in May 2021, 100,815 were transgender (59,460) or non-binary (41,355), accounting for 0.33 per cent of the population in this age group.

The proportions of transgender and non-binary people were three to seven times higher for Generation Z (born between 1997 and 2006, 0.79 per cent) and millennials (born between 1981 and 1996, 0.51 per cent) than for Generation X (born between 1966 and 1980, 0.19 per cent), baby boomers (born between 1946 and 1965, 0.15 per cent) and the Interwar and Greatest Generations (born in 1945 or earlier, 0.12 per cent).

Over time, the acceptance and understanding of gender and sexual diversity has evolved. Further, there has been social and legislative recognition of transgender, non-binary and LGBTQ2+ people in general. Younger generations may be more comfortable reporting their gender identity than older generations.

In May 2021, the Canadian population aged 15 and older had an average age of 48.0 years.

In comparison, the transgender population had an average age of 39.4 years, while the non-binary population had an average age of 30.4 years.

Just under 1 in 100 young adults aged 20 to 24 were non-binary or transgender (0.85 per cent).

Nova Scotia (0.48 per cent), Yukon (0.47 per cent) and British Columbia (0.44 per cent) had the highest proportions of transgender and non-binary people aged 15 and older among provinces and territories.

Victoria (0.75 per cent), Halifax (0.66 per cent) and Fredericton (0.60 per cent) had the most gender diversity among Canadian large urban centres.

Just over half of non-binary people aged 15 and older (52.7 per cent) lived in one of Canada's six largest urban centres: Toronto (15.3 per cent), Montréal (11.0 per cent), Vancouver (10.8 per cent), Ottawa–Gatineau (5.6 per cent), Edmonton (5.4 per cent) and Calgary (4.5 per cent).

Nearly 1 in 6 non-binary people aged 15 and older (15.5 per cent) lived in the downtown core of a large urban centre. This share was more than twice that of transgender people (7.0 per cent) and over three times higher than that of cisgender people (4.7 per cent).

(Source: Statistics Canada)

E SPORTS

HOW HOTELS CAN CAPITALIZE ON THIS MASSIVE BUSINESS

DURING THE PANDEMIC, the sporting world ground to a halt.

Global events such as the Olympics, Formula 1 racing, the UEFA Champions League and American basketball were all postponed. As an alternative, Formula 1 launched a virtual Grand Prix series featuring professional F1 drivers. Similarly, Leyton Orient football club organized an online FIFA tournament. This competitive online video gaming is known collectively as esports and brings excitement and competition at a time when traditional sporting events are unable to. The explosion in popularity during COVID-19 meant the global virtual audience of esports exceeded 700 million fans in 2021. At the same time, hospitality and tourism sectors experienced the opposite fate. Continual lockdowns led to a sharp decline and the almost complete shutdown of tourism activity for many months. When professional sport resumed once again, the majority of matches and events were played behind closed doors. With no fans or tourists attending games, mass global events including the Tokyo 2020 Olympics received little income. Mega sporting events normally lead to a spike in spending on food, drink, hotels, parking, concessions and merchandise. However, online viewership only meant cancelled travel plans and bookings to host cities.

Jamie Thompson Lecturer in Marketing, Edinburgh Napier University

Babak Taheri Professor of Marketing, Nottingham Trent University

So, with a fast-growing esport industry and a tourism sector just beginning to recover from lockdown, shouldn’t the hospitality industry be actively attracting esport fans? In our research, we wanted to look at how the industry can capture the esport fanbase and convert them into active tourists. We surveyed 549 fans of competitive esport video game League of Legends alongside a 12-month observational study of active World of Warcraft players.

Esports, fans and live events

At its peak, the League of Legends’ 2021 world championship had over 4 million online viewers. Yet, despite substantial online audiences, even pre-pandemic, only a small fraction of esport revenue came from ticket sales, meaning few fans

are willing to travel to live events.

There are some arenas that have generated large crowds, such as Korea’s Sangam Stadium. The experience for these spectators can be truly captivating. Huge immersive screens are set up to show the competitive gameplay between teams, amplifying the excitement and tension in the crowd.

However, by not actively seeking esport viewers, the tourism and hospitality industry risks alienating a growing global fanbase. This means the opportunities offered by the attractive and potentially lucrative market may be lost.

Esport teams such as Na'Vi; Alliance; T1; KT Rolster; OpTic and FaZe enjoy fierce rivalries playing Dota 2, League of Legends, and Call of Duty. Loyal fans and spectators are passionate about their

favourite teams and branded merchandise is becoming big business for esports.

There is an opportunity here for host cities to offer activities and events specifically for those attending competitive esport events. It is worth considering, for example, special teamspecific fan zones and social spaces to capitalize on the loyalty of passionate followers. They bring passion and excitement to a sporting event, making them unmissable events for those who consider themselves diehard fans.

Building enthusiasm for events

Esport is experienced online as a social community. Yet, for the most part, it is consumed without any actual proximity to other spectators.

This means a potential spectator is

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more likely to be travelling alone or hoping to meet up with online friends in person for the first time. This makes buying tickets and travelling to an event a daunting prospect for many.

However, local event providers could do more by offering forums and discussion channels that could build enthusiasm and anticipation in the run-up to the event. These online spaces would also give fans a chance to seek advice and support on where to stay and what to do, making the transition from online to offline much less daunting.

The esport calendar is dominated by prestigious world championship competitions such as League of Legends, StarCraft II and Crossfire. Much less enthusiasm is generated for smaller qualifying or regional competitions. In fact, they usually take place exclusively online.

Travelling internationally to competitions

can be less appealing to many fans. The cost of attending large sporting events is high, particularly for esport’s predominantly younger audience.

Local events could offer an entry point to first-time live event spectators –building a passion for experiencing esport competition in person.

The draw of star players

Esport prize money and salaries are growing substantially. The winners of the biggest DOTA 2 esport tournaments have taken home over $5 million in prize money. This makes them big-time celebrities by any metric, and their attendance at events can be a big draw for fans. Meeting and interacting with star players is a once-ina-lifetime opportunity, and needs to be part of the esport promotional strategy.

Event organizers could offer some additional fan viewing opportunities to

see players practise and warm up. This would give greater value to the live event experience versus watching online.

The growth in esports shows no sign of slowing down, but live events are yet to take off to the same extent as online viewership. If tourism and hospitality can attract even a small fraction of esport’s 700m online viewership, then this could be a significant new revenue stream for cities hosting these events.

Mega esport competitions could become mass flagship events in the sporting calendar. These events have the potential to book out whole stadiums, which benefits hotels, bars, shops and local tourism. In the wake of the pandemic, tourism everywhere is suffering. The hospitality industry needs to get creative and seek out new opportunities like esport and tempt massive online audiences to experience their passions in the real world.

1. Atari Hotels, various locations, U.S

2. Luxor, Las Vegas, Nev., U.S.

3. Esports Hotel E-Zone Cyberspace, Osaka, Japan

4. The Arcade Hotel, Amsterdam, The Netherlands

5. iHotel, Taoyuan City, Taiwan

Luxor, Las Vegas, Nev

Atari Hotels

Photo: © Atari Hotels

Esports performance venue and hotel coming to Toronto

Construction on new Toronto esports venue planned to begin in October, 2022 as Exhibition Place Board approves concept design for scheduled completion in 2025

OverActive Media is building an esports performance venue in Toronto, Ont. The company unveiled its plans in 2021, secured lease terms approval from the Exhibition Place Board of Governors in Toronto and approval by Toronto City Council.

“…We have worked hand in hand with all of our city partners to bring our collective vision for the venue to the next level, and we could not be more excited to finally be able to share our latest plans with our fans in Toronto and the world,” said Chris Overholt, president and chief executive officer of OverActive Media. “Toronto is one of the best entertainment markets in the world. We have worked closely with our partners to begin to realize the immense potential of this region of the city while furthering Toronto’s position as a global esports hub. Our vision is to create an unparalleled experience for fans and entertainment artists alike.”

Located in the heart of the historic Exhibition Place, the theatre-style entertainment venue and hotel complex is a strategic element of the approved master plan for the region previously established by city officials. Positioned on the north side of Lakeshore Blvd., and across from Ontario Place, the venue is expected to become the epicentre for what is starting to emerge as Toronto’s future meeting place for sports, media and entertainment.

With a projected completion date of 2025, the 7,000-seat venue is designed to be a destination at its core. The facility plans to host more than 200 events a year, driven primarily by premium music and entertainment bookings. It will also serve to attract major city-wide conventions, corporate events and product launches, awards shows and naturally, a full slate of esports events increasing over time. Additionally, it will provide a home for the city’s two professional esports teams, Toronto Ultra of the Call of Duty League and Toronto Defiant of the Overwatch League.

“We took a bold step forward together today toward realizing our vision to build a preeminent performance venue in the city of Toronto, one that we believe will serve as a new home for the biggest music and entertainment acts of the world and a favourite venue for today’s generation of fans,” added Overholt.

Developed by global design firm Populous, the designs are purposeful, intended to create an engaging space for all fan activations, events and programming. Key design features and highlights include:

• Located along the waterfront, the performance venue offers prominent open public space with stunning views and pedestrian access.

• The in-bowl design caters to traditional music acts, largescale events and the best in esports competition and entertainment.

• The hotel tower offers unobstructed 360-degree views, including Lake Ontario and the remarkable Toronto skyline.

• Situated between the venue and hotel is a privately owned public space (POPS) – an urban room that joins the venue and hotel, allowing for additional programming opportunities and chance meetings to occur.

• The interior design of both the venue and the hotel offer authenticity and a refined sense of style, inclusive of distinct influences which are uniquely Toronto.

OAM stadium in concert mode, artist's render.

OAM esport stadium and hotel, artist's render, Toronto lakeshore view.

“Over the past several months, we’ve had the opportunity to engage with OverActive Media, the Exhibition Place Board of Governors and the City of Toronto to carefully choreograph the relationship between the venue, the hotel and a new urban room that connects the two,” said Jonathan Mallie, senior principal and lead designer for Populous. “The design has evolved to further integrate a dynamic building program and expression into the fabric of Toronto.”

OAM stadium in esport mode, artist's render.