STAY Magazine, Vol. 1. Issue 1

Page 1

STAY

CANADIAN HOTEL INTELLIGENCE

Impetus: global crises

A sustainable hotel sector is imperative

Reframing Relationships... Understanding the labour market

BACK TO THE FUTURE?

Defining success - Hotels are coming back in meaningful ways

CHOICE lessons

Brian Leon: Learning from adversity

The latest intelligence from HVS

N OV/DEC 2021 PREMIERE ISSUE

PUBLISHER: Joe Baker joe@staymagazine.ca

MANAGING EDITOR

Stacey Newman stacey@staymagazine.ca

ADVERTISING SALES

Jana Ray jana@staymagazine.ca

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WHO WE ARE

CONTRIBUTORS

Andrea Yu

Vicky Qiao

Brian Leon Carrie Russell

Tom Beckett

Joe Baker

Stacey Newman

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.

Big Picture New Media 45 St. Clair Avenue West, Suite 1001 Toronto, ON M4V 1K9

© Copyright 2021 All rights reserved. No part of this magazine may be reproduced without written permission of Big Picture New Media, the publisher.

EDITORIAL ADVISORY BOARD

Brian Leon President, 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 Chief Legal Officer, The Gupta Group

Sandra Kanegawa Owner, Heritage Inn Portfolio, X-Dream

INSTAGRAM staymagazine LINKEDIN @staymagazine TWITTER @StayMagazineCA STAYmagazine.ca

35 PROFILES:

Hotels are coming back in meaningful ways, read success stories from Sageblan Investments' Gaurav Gupta and Accent Inns’ Mandy Farmer

Back to the Future

ON THE COVER:

The lobby of 1 Hotel Toronto.

A luxury lifestyle hotel brand inspired by nature—1 Hotel Toronto presents the best of sustainable design and architecture, extraordinary comfort and unrivalled level of service. The property’s biophilic design was done in collaboration with awardwinning architecture and design firm, Rockwell Group, and project managed by The Athen’s Group which specializes in the development of environmentally conscious upscale hospitality properties.

1 Hotel Toronto features 112 guestrooms and 21 suites. 1hotels.com

CONTENTS 6 May We Recommend 12 CHOICE Lessons: Learning from adversity, planning for a better future with Brian Leon 28 IMPETUS: GLOBAL CRISES Rebuilding a sustainable hotel sector 18
Carrie Russell
Tom Beckett of HVS offer projections for 2022 as we emerge from the pandemic; maintaining a positive perspective while asking hard questions and shaping realistic forecasts.
and
the anguish
pressure on
hotel
STAY CANADIAN HOTEL INTELLIGENCE BACK TO THE FUTURE? The latest intelligence from HVS Reframing Relationships... Understanding the labour market Impetus: global crises A sustainable hotel sector imperative ngba in meaningful ways HO CE lessons ing adversity
42 Reframing relationships: Understanding
of labour-market
the Canadian
sector
STAYmagazine.ca 28 42 12 48 INNSIGHTS Upcoming events + debriefs wclc | western canadian lodging conference returns in-person November 15 & 16, Vancouver, B.C
November December 2021 | staymagazine.ca | 3
BRIAN LEON
avid™
hotels Oklahoma City - Quail Springs Candlewood Suites® Springfield
With a strong portfolio of brands, an expansive global footprint, and an impactful loyalty program, IHG® Hotels & Resorts is committed to the success of our stakeholders and our purpose to provide True Hospitality for Good. DEVELOPMENT.IHG.COM ©2021 IHG Hotels & Resorts. All rights reserved. Most hotels are independently owned and operated.
Hotel Indigo® Lower East Side New York

PUBLISHER’S

NOTE

And few predicted it would come upon us as quickly and as systematically as it did. There is no denying we are now living and leading in an era of disruption. And let’s not kid ourselves. The end of disruption is nowhere in sight.

We are honoured to present STAY Magazine, a hotel industry trade publication focused squarely on being additive to the many stakeholders across Canada’s distinct lodging and accommodations sector.

We are a publication that will create value and celebrate values. We understand that as much as we believe in the need to be one of many diverse voices, we ourselves are committed to curating content by encouraging diverse dialogue.

Many understand the economic value of Canada’s hotel industry. Some see the impact of the visitor economy on our country. But fewer truly understand the cultural impact Canada’s hotels have on our local communities, guests and visitors, and our workforce. STAY will explore the breadth of this relentless industry.

From the renaissance of a national presence to the resurgence of a local autonomy, the aftermath of this pandemic will remind us we are not only able to create innovation through crisis response, but we are also ready to build capacity once again.

Many experts anticipated the inevitable disruption of Canada’s hotel industry. But most believed it would be technology, not biology, that would change the way we do everything.
November December 2021 | staymagazine.ca | 5

RECOMMEND

PRODUCTS SERVICES EQUIPMENT

Enabling the

adoption of electric vehicle infrastructure across Canada CF Energy’s low carbon energy utilization project Le Germain Hotel

Opus One Solutions, a Global Cleantech 100 company, has partnered with five entities, including renewable energy solutions firms Anvil Crawler Development Corp. (Anvil Crawler) and Skyline Energy, to complete a microgrid installation project to reduce barriers to the adoption of electric vehicles (EVs) in Canada.

Up to nine microgrid systems will be installed at diverse sites, including apartment buildings, commercial properties, retail properties, and attractions. Among the first group of three microgrid systems is an installation at the Cambridge Hotel and Conference Centre at 700 Hespeler Road in Cambridge, Ont.

• The project received a $2.3 million investment through Natural Resources Canada’s Green Infrastructure – Electric Vehicle Infrastructure Demonstration Program, which aims to accelerate the market entry of nextgeneration clean energy technologies.

• The project partners expect that the development of the EV charging infrastructure will allow real estate owners and utilities to establish processes and procedures that will act as a blueprint for convenient future EV charging solutions.

6 | staymagazine.ca | November December 2021

MAY WE
• The project will involve the installation and seamless integration of EV charging stations and renewable technology at the site, which will minimize the need for expensive grid infrastructure upgrades at the location while allowing the property owners and businesses to operate as usual—with the added benefit of offering the attractive feature of on-site EV charging to their residents or patrons. Montreal unveils new mural iMirror Book4Time launches fully integrated payment solution
• The project aims to demonstrate a novel approach to the control of energy flow between the utility and energy asset owner. This enhanced control will be enabled by Opus One Solutions’ GridOS DERMS (Distributed Energy Resource Management System), an energy distribution management software that helps utilities manage these new loads optimally while minimizing the need for expensive grid infrastructure upgrades.
Enabling the adoption of electric vehicle infrastructure across Canada

CF Energy’s low carbon energy utilization project

CF Energy Corp., a new energy service provider in China, has announced that its Haitang Bay Integrated Smart Energy Phase One Project has successfully commenced operation in September of 2021. The first group of commercial customers that received the district cooling supply service includes The Sanya Edition Hotel, Fairmont Sanya Haitang Bay and Westin Sanya Haitang Bay Resort. The DoubleTree Resort by Hilton is also expected to be connected upon completion of its renovations. The collective cooling space of these customers is about 195,040 square meters.

The Haitang Bay Integrated Smart Energy Project (the Project) has been recognized as a low carbon energy utilization project in the tropical resort city of Sanya, in south China’s Hainan Province, to provide air-conditioning with re -

duced emissions. Upon completion of the project, it aims to provide cooling services for public facilities in the Haitang Bay area, covering about 4.7 million square metres of cooling space, including many high-end hotels and commercial buildings.

The project integrates advanced energy-saving technologies, such as ice storage and water-source heating pumping. It is expected to save about 30,000 tonnes of standard coal and reduce about 100,000 tonnes of carbon dioxide, sulphur dioxide and nitrogen oxide emissions every year.

The service aims to help customers reduce their energy consumption management costs while promoting a sustainable and economic business model in China.

November December 2021 | staymagazine.ca | 7
Hyatt and related marks are trademarks of Hyatt Corporation. © 2021 Hyatt Corporation. All rights reserved. For more information, contact Scott Richer, Vice President Real Estate & Development 416.300.8215 | scott.richer@hyatt.com PARK HYATT TORONTO THE WALPER HOTEL, PART OF JDV BY
REGENCY
HYATT PLACE MONCTON/DOWNTOWN
HYATT HYATT
VANCOUVER

Le Germain Hotel Montreal unveils new mural

Le Germain Hotel Montreal has unveiled a major project collaboration with MURAL , North America’s largest urban art festival. The boutique hotel now displays an impressive permanent mural entitled “Dazzle My Heart” by Canadian artist Michelle Hoogveld, on its front facade.

“It’s important for us to participate in the cultural and commercial revival of the downtown area. By using the hotel’s facade as an artistic showcase, we hope to restore the value of the downtown area and encourage people to visit and keep coming back,” explains Christiane Germain, co-president of Germain Hotels.

A Full Immersion Leads to a Colourful Finish

Michelle Hoogveld, a Calgary native turned Montrealer, stayed at Le Germain Hotel Montreal for a week before starting the project and then throughout the completion of the piece.

“It allowed me to soak up the energy of the hotel and add these new feelings to my mural. It’s even more emotionally charged,” adds the artist, who uses colour to convey her emotions.

Towering at over 171 feet, the artist had to, for the first time in her career, work on a platform suspended from the roof of the hotel to apply the 80 different colours and create this impressive masterpiece. Art fans and architecture enthusiasts will be able to admire this impressive work of art while visiting downtown Montreal.

The mural dramatically transforms the hotel’s exterior. The entire project perfectly reflects some of the fundamental values of Germain Hotels, namely its daring philosophy and its keen sense of aesthetics.

PRODUCTS SERVICES EQUIPMENT MAY WE
RECOMMEND
November December 2021 | staymagazine.ca | 9

iMirror is the creation of Calgarybased technology firm, NOBAL. These “mirrors that perform” act like an allaccess concierge.

Every guest has a unique preference profile. From the minute they enter the hotel lobby through to their suite, iMirror’s hospitality solution is built to provide guests with easy access to recommen-

NOBAL recently entered into an agreement with Caesars Entertainment to install and display two iMirrors at Black Fire Innovation Center. The center is a partnership between the University of Nevada at Las Vegas (UNLV) and Caesars Entertainment (part of the U.S. hotel chain).

At the the Four Seasons Resort in Whistler, B.C., guests use iMirrors to check weather, maps and ski conditions.

PRODUCTS SERVICES EQUIPMENT MAY WE ©2021 Samsung Electronics Canada Inc. All rights reserved. Samsung is a registered trademark of Samsung Electronics Co., Ltd., used with permission. Create a premium guest experience From arrival to departure, and everywhere in between, Samsung’s innovative display technologies provide guests with a modern, integrated, and engaging experience. Visit www.samsung.com/business to learn more
RECOMMEND

Book4Time launches fully integrated payment solution

Book4Time spa and wellness business management solutions for the hospitality market has launched Book4Time Pay, the company’s new all-in-one payment processing platform.

Book4Time Pay provides customers with the ability to take guarantees at the time of booking, accept EMV credit/debit at point of sale, sell gift cards online, manage recurring membership billings as well as provide self-service mobile checkouts. It also comes with flat-fee pricing and no hidden or set-up fees, enabling spas to realize significant savings to the bottom line.

“The idea is to provide our clients with a complete end-to-end solution,” says Ali Mroueh, director of payments, Book4Time. “The release of Book4Time Pay was driven by the need for simplification. Our clients often struggle with limited IT staff and having to juggle various technologies; now they have one.”

To learn more about Book4Time Pay, please visit book4time.com.

November December 2021 | staymagazine.ca | 11

CHOICE LESSONS

LEARNING FROM ADVERSITY, PLANNING FOR A BETTER FUTURE

I’d like to begin by saying how honoured I am to be contributing to the inaugural issue of STAY. I think we can all agree that having another voice for our industry is particularly important as we emerge from a worldwide pandemic. On behalf of Choice Hotels Canada, I’d like to congratulate the new owners, editors and writers of STAY and look forward to future collaborations.

Although we can’t say the pandemic is over just yet, as we look to the future of our industry, a few important things come to mind. The first is, we are recovering. We’re hopeful for a return to 2019 levels in this country by the end of 2022 or early 2023. And let me preface that by mentioning that we are perhaps not your average hotel franchisor, in the sense that we outperformed some of our competitors during the pandemic.

In the over 200 secondary and tertiary markets across the country in which we operate, our hotels have not been impacted in the same way as some urban markets. Due to the nature of the upper-midscale market in Canada, our Comfort and Quality hotels, primarily, have tended to perform better than average during the pandemic.

Early on, we found ourselves in a unique situation, in that hotels were deemed an essential service. We pivoted to support that new reality. We have housed essential workers, transformed into quarantine hotels and provided longer-term stay opportunities for individuals displaced by the pandemic. While we had some temporary closures, and some hotels sold for non-hotel use, all the hotels in our system are now fully open. And despite the pandemic, we continue to work in development and have had a steady level of new hotels opening this year.

In terms of recovery at the hotel level, with increased vaccination rates and people anxious to travel (at least domestically), we’ve seen business skewed towards the more resilient leisure traveller, with some particularly strong performance in resort markets. We’ve also seen a lot of resilience in our rubber tire corporate business, and are seeing an uptick in small and medium events. The major piece of business we’ve not seen is larger-scale corporate bookings, like conventions, but we expect those to start coming back next year. >

November December 2021 | staymagazine.ca | 13
More Power Today. More Value Tomorrow. MARRIOTTDEVELOPMENT.COM

Advances in technology will continue to play a key role in both enhancing the guest experience and increasing the efficiency of hotel operations

This recovery is also different from the typical recovery periods we’ve experienced in the past. Typically, when we’ve experienced slower economic times, recovery kicked off with growth in occupancy rates. This pandemic recovery is different, in that we are seeing an increase in rate, followed by occupancy. By way of example, in recent months while our occupancy rates have continued to lag behind 2019 levels, rate has actually been above what we saw for the same period pre-pandemic. That puts our hotels in a favourable position as demand returns to the market.

As we look forward, we believe there is much we’ve learned throughout the pandemic that positions us for success in the future. Collaboration with our franchisees has made us stronger and better equipped to serve our hotels in the future. When the pandemic began, we knew we didn’t have all the answers, and we sought increased feedback and guidance from our franchise community as we worked to address the challenges in front of us. We’ve never communicated with our franchise community more, and that’s a positive by-product of this unprecedented time.

Labour will continue to be a topic of concern, with hotels looking to hire as operations become more robust. Like many industries, we saw people leave the workforce during the pandemic. It is up to the hotels to continue to not only hire and train, but also create healthy work environments to attract new people to hospitality. Our franchisees understand and appreciate what it means to build a great team and deliver on guest expectations.

In terms of guest expectations, we’re acutely aware of the priority this will take in our path to recovery. With more sources of information than ever online, guests are more knowledgeable and have many choices when it comes to accommodations. Safety and cleanliness continue to be the driving force behind making our guests feel welcome, wanted, and respected. We strive to make a difference every day because our guests are demanding it. We’re going to see the industry more focused on things like touchless check-in, sustainable practices, and heightened cleanliness. Choice’s Commitment to Clean initiative builds upon the strong foundation of our franchisees’ long-standing dedication to cleanliness with enhanced best practices for cleaning and disinfecting.

Advances in technology will continue to play a key role in both enhancing the guest experience and increasing the efficiency of hotel operations. Increasingly hotel guests have been demanding a more personalized experience, whether it be related to the timing of room cleaning, connecting via text with hotel staff or proactively responding to other guest preferences. We’ll continue to see an evolution of these new technologies, that enable our hotels to provide greater personalization and to add operating efficiency.

So now that we are in recovery, what does the future look like?
CHOICE LESSONS November December 2021 | staymagazine.ca | 15

Through our work with the Hotel Association of Canada, we are prioritizing sustainable practices. Corporate guests in particular are demanding that we have sustainable initiatives in place. We are working towards broader accreditation of the Green Key Global initiative, a certification program administered by the Hotel Association of Canada (see the article on page 28 for more about Green Key). While green practices have been a focus for us in the past, we are committed to renewing our strategic focus on sustainability.

We’ve also been actively involved in the advocacy efforts of the Hotel Association, which have been key to ensuring the government has had a clear line of sight on our sector. Our franchisees have been able, in large part, to participate in the industry-government relief programs, now extended into the spring of 2022. Our team is proud to have helped many of our hotels navigate their new financial realities. There is no doubt that we as an industry have all benefited from much-needed government support.

Another recovery focus for our franchisees is costs. This is one area much more within our direct control, as opposed to some of the external factors that have impacted hotel revenues. If there is one thing we’ve learned from the pandemic, especially in our industry, is that COVID-19 has been unpredictable and relentless. While we continue our efforts to drive the best possible revenues, we are also looking at ways we can eliminate unnecessary costs from our hotels, without impacting the quality of guest experience.

Resilience

Despite the overwhelming challenges that hotels have faced, our franchisees have persevered and weathered the storm. I see that regularly when I talk with our franchisees, their spirit of optimism is truly inspiring. As an industry, we are still attractive to financial institutions, as we have proven that we can operate lean. The fact that we are seeing a return to financing to our markets is a strong indicator of confidence in the industry.

The foundation of our industry is strong. Everything we’ve been through these last 16 months has shaped our future. But we aren’t just sitting and waiting for it. Guests have already started travelling again and our team is focused on how we make the best of that while meeting that demand for travel. While we are still not through this, the future of travel is bright and we have a clear path ahead. We’re excited about what the future will bring.

16 | staymagazine.ca | November December 2021
We’re going to see the industry more focused on things like touchless check-in, sustainable practices, and heightened cleanliness.

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STAY IS

BACK TO THE FUTURE?

magazine brings you Canadian hotel intelligence derived from in-depth interviews with experts from across the hotel sector and the country. In this issue, we have spoken to Carrie Russell and Tom Beckett of HVS about making projections based on sometimes skewed numbers from pandemic periods; and maintaining a positive perspective while asking hard questions and shaping realistic forecasts.
STAY
CARRIE RUSSELL, AACI, MAI, RIBC, ISHC Senior Managing Partner, HVS, Vancouver TOM BECKETT, AIC CANDIDATE MEMBER Senior Vice President, HVS, Vancouver
18 | staymagazine.ca | November December 2021

CANADIAN HOTEL OCCUPANCY RATE YEAR-TO-YEAR COMPARISON

What is the average daily room rate today?

Same period—January through September, for 2021 it was $136.84. Last year—2020—same period, $135.58 and 2019 same period, $168.60.

What is RevPAR today?

The RevPAR at the end of September 2021 was $54.22; 2020, $43.72; 2019, $112.88. So, a 52 per cent decline in RevPAR from the 2019 levels.

How did we fare in 2021?

What is the Canadian hotel occupancy rate today?

January through September 2021, the occupancy rate is at 37.7 per cent. That compares to 32.2 per cent in 2020. In 2019, it was 66.9 per cent. Getting better than last year, but dramatically off of the peak in 2019.

Looking at just the weekly stats (these will become a bit more relevant), in the middle of the third week of August, we peaked at just shy of 62 per cent occupancy for the country. The last week of September it was at 52 per cent and by mid-October it fell to 47.0 per cent. The third week of August is usually the best week of the year in Canada. We don't typically see as dramatic a dropoff in September. So, we saw more of a gap between the August and September numbers than we would normally see.

From the RevPAR stats, we've improved over 2020. But the reality is that the expectation was a much greater improvement than what we've seen so far. It's not worse, but we thought it was going to be a lot better. It varies regionally and by purpose of travel. If you look at downtown core markets, they struggled immensely in 2020 and they’re continuing to struggle into 2021, but not as badly.

2019 66.9% 2020 32.2% 2021* 37.7% *JAN-SEPT
WE'RE MISSING THE BUSINESS TRAVEL/CORPORATE TRAVEL PIECE OF THINGS, AND WE'RE MISSING THE GROUP TRAVEL. AND THAT MAKES UP FROM 60 TO 80 PER CENT OF THE DEMAND DEPENDING ON WHICH URBAN MARKET YOU'RE TALKING ABOUT IN THE COUNTRY.
FUTURE?
2019 $112.88 2020 $43.72 2021 $54.22 INTELLIGENCE November December 2021 | staymagazine.ca | 19
RevPAR, END SEPTEMBER

.

To have those two pieces decimated in 2020 and 2021, that has been a huge challenge.

If we then look at the resort markets—the first part of the year was a challenge because there were health restrictions in place, but as soon as the summer season opened up there were a lot of resort markets that had a peak season RevPAR higher than in 2019!

QUESTION MARKS

They saw that demand was there. In 2020 we probably didn't price for it as well, because it was so early into Covid. They didn't know if people were going to want to travel again. They knew in 2021 that as soon as people were allowed to travel, they were going to and they are. The pricing in 2021 was exceptionally strong for these resort markets. They’ve had better years, from an average room rate perspective, than they've ever had in the summer months that drove new record RevPARs.

Anecdotally, the improvement is being seen in global resorts markets too. We can look at the U.S. stats. The destinations are curious—but the regional drive to markets for example like Pensacola, Fla. has been really, really strong.

Resort labour was more expensive

The numbers would have been better if we didn’t have the labour challenges at resort destinations, there was additional demand that was left unaccommodated in the markets. They were limiting occupancy at the hotels because they didn't have staff to clean rooms and service guests. The occupancy numbers could have been better. There might've been a slight trade-off on the rate side of things because they knew they were limiting occupancy and they would have more demand than they could accommodate, and as a result they were very aggressive on rate. Overall, I think that the labour in resort markets constricted the ability to grow numbers in 2021. It also inflated costs for them—there's no question that they had to pay more for housekeeping and labour, ensuring they had staff security to meet guest needs.

Income

If you look at 2021 in totality, the resort markets will be down— and not insignificantly at that—even though they had a better summer season. We don't want to look at the whole year and say that the whole year was better for even resort markets, because of the health restrictions in 2021, but certain areas you just couldn't travel to. They were shut down. If you point to just their July, August season and probably into the fall, they will be doing better from a revenue standpoint. So, their summer occupancy, while it might've been restricted, I think they compensated on the rate side. Overall revenues were higher in the summer peak season, but costs would have gone up and it wasn’t nearly enough to offset the dismal shoulder and off-season.

What is the outlook for 2022? If 2021 was a disappointment, will the projections be more cautious?

Our estimation for the country in 2021—we will likely be close to 37 per cent occupancy. Next year for the country we’re projecting around 52 per cent occupancy.

The average daily room rate for the end of 2021 will likely be around $130.74. The forecast for 2022 is around $143.81, and that translates into RevPAR of $47.81 this year, and a projection of around $74.84 for 2022.

20 | staymagazine.ca | Autumn 2021
November December 2021

QUESTION MARKS

It’s important to note that the numbers are going to vary significantly by region. Much like 2021’s recovery period in terms of some areas outpacing others. That's going to be the story probably for the next two years on both the demand and rate sides. Urban markets are going to be slower to recover. We’ll likely see better recovery in the suburban and resort markets.

Where is business going to come from over the next six months?

When you look at the simplest of segmentation— in Canada we've got commercial/government demand, we've got meeting and group demand and we've got leisure. That breaks it down into the simplest variables. We've been sustaining ourselves to get to these occupancy numbers on predominately leisure demand and what we’re waiting to see—and want to get stability around—is the corporate and government traveller and the meeting and group business.

WE WILL LIKELY SEE A RETURN TO 2019 LEVELS, NATIONALLY, AROUND 2025. IT'S A LONG AND UNEVEN PROCESS TO GET BACK TO WHERE WE WERE.
$150 $175 $100 2019 2020* 2021* 2022* $125 100 80 60 40 PROJECTIONS FOR AVERAGE DAILY ROOM RATE AND RevPAR *PREDICTED NUMBER INTELLIGENCE Average daily room rate RevPAR November December 2021 | staymagazine.ca | 21

What we're seeing is that the market is very domestic right now. We're not seeing a huge influx of cross-border travel, even though the U.S. border has opened to vaccinated Americans. We're not seeing a large pop in those U.S. numbers. We're going to be relying pretty heavily for the next six months on domestic travel.

We're seeing social groups and activities happen around weddings etc., and not on the corporate types of events. I think we'll start to see some team business, which wasn't travelling for much of last year i.e., hockey tournaments and university club teams. We’re already seeing some of that this fall that hasn't been there in the previous year. What we're missing to get us back to the occupancy numbers is the real road warrior corporate piece of the market and the large corporate group functions

What will carry the industry forward?

I think that everyone's hope and expectation is that government funding will stay in place because it's been pretty critical. The other piece of sustaining the business over the next little while is the relationships with lenders. From negotiations to deferring payments, businesses are looking for flexibility from lenders regarding expenses. Some hotels are highly leveraged, and some hotels don't have a lot of debt on them—if they're highly leveraged, then they've got challenges on the debt side. Some of that might mean just having to come out of pocket and fund. It might mean some owners in the space decide that they're going to sell certain assets to survive. There will need to be money injected into these properties to sustain them if they've got a lot of debt on them. And if you don't have the funds to inject, your alternative plan is to sell. That’s something we haven’t seen much of to date since the pandemic began, but as the recovery gets underway more of those decisions are likely to be made as some owners rationalize their portfolios and we’ll see the transaction market pick up.

Re-opening

The majority of hotels are back online, with a much smaller number of hotels that have not reopened. Some of them are still contracted to government organizations for social housing needs and that kind of thing. I don't think there's a lot of people sitting on the fence deciding should they be, or shouldn't they be opening their hotel.

THE RECOVERY

22 | staymagazine.ca | November December 2021

Seasonal trends in the hotel sector, do they still apply?

I would say that the seasonal trends still do apply. You can see that in the way we peaked in the same place in August. It didn't matter to the leisure piece. The seasonal trend has been retained. We're also retaining a lot more domestic travel that might go south in the winter. Travellers are choosing to go to Vancouver Island or domestic resort destinations versus international. We're pushing leisure and containing our leisure in a much larger season than we normally would, which is a good thing from the seasonality of the leisure perspective.

Unfortunately, the seasonality of the group market, which would normally be in the spring and fall months of the year isn’t there. I don't think the seasonality has changed. I think that groups still expect and want to meet in the September, October March, April period, but right now they're not comfortable meeting at all. There's real damage on the group side of things.

We've probably extended the seasonality of the social weddings type market and certainly extended the weekday demand patterns. You're now seeing events being held on weekdays and Sundays because you can't get a Saturday in June anymore. So, we haven’t completely disrupted our seasonal patterns. But it's going to take a little while to get the demand back to tracking a similar pattern.

RECOVERY

Barriers to recovery

INTELLIGENCE November December 2021 | staymagazine.ca | 23
I THINK THAT ONE OF THE BIGGEST BARRIERS IS THE INTERNATIONAL GROUP PIECE. THAT'S THE ONE THAT'S GOING TO TAKE THE LONGEST TO RECOVER AND IT’S WHY WE'RE PUSHING THE FULL RECOVERY OUT TILL 2024 OR EVEN 2025.

It’s important to look at all the possibilities and face some of the more difficult questions being asked by owners and operators such as:

WHAT IF WE DON'T RECOVER TO 2019 GOALS? WHAT IF IT'S NEVER?

WHAT IF WE ARE OPTIMISTIC AND SAY, IT COULD BE 2023?

HOW LONG ARE WE GOING TO LOOK AT 2019 AS THE BENCHMARK THAT WE CAN RECOVER TO? IS CORPORATE TRAVEL FOREVER CHANGED? WHAT IF WE DON'T HAVE THAT DEMAND IN THE MARKET, WHAT HAPPENS TO THE SUPPLY OF HOTELS?

There are owners out there who may not feel comfortable sharing these things publicly, but they’re out there thinking I'm concerned this doesn't get a lot better. Or I'm concerned it doesn't get back to where it used to be. I'm out of this space. I don't have the hundreds of thousands, or millions of dollars to continue to fund this business for the next two or three years. I think we're going to see transaction activity stem from this. I think we're going to see people starting to test the market, asking What’s my hotel worth? And does it make more sense for me to divest?

There are a lot of owners who have owned for a long time. They didn't buy in 2019 at the peak of the cycle. Maybe they built in 2012 and rode the wave up. Maybe they're taking a hit from what their expectation of value was in 2018 or 19, but they still made a lot of money from where they were in 2012. Will they say I don't want to fund this anymore… I'm going to step out of the space?

There are certainly optimists on the flipside. Some of the people that are buying today would say, with the hotel industry as beaten up as it's ever been; it's a buying opportunity. Unfortunately, we don't have a lot of trades to be able to say this is a real discount to what it was before. There hasn't been any pressure from the lending sector yet to force people into transaction activity. And there's been a lot of government funding to support them. So those two variables have kept hotel owners in place. But as the government money starts to get removed from the market and lenders start to demand principal payments, things will change.

If we don't see that recovery on the income side of it come back, that's when there'll be even more hard decisions that have to get made.

THE RECOVERY

24 | staymagazine.ca | November December 2021

Guest expectations today and tomorrow

We may have changed expectations through this pandemic—because of labour shortages, because of Covid and spreading germs, we've limited housekeeping. It used to be a standard expectation that you were going to get a stay over clean if you were staying at a hotel for multiple days. Right now, there's a lot of hotels that aren't cleaning rooms every night. Guests check-in and stay for two or three nights and they don’t have housekeeping during that stay.

At this point, guests are fairly patient with that, and not uncomfortable with that service change. For hoteliers, that's a huge cost saving if you don't have to do cleaning every day in a guestroom.

There's also a sustainability element there that could be harnessed going forward. We already have seen some changing behaviours.

We’re flipping the models. Some group hotels in New York for example are telling guests that if they want a stay-over clean, they can have it, but they have to pay for it. We might change the pricing model in hotels where certain things become add-on costs to get those overall rates back up.

On the rate side, we've seen promising signs in certain pockets of operators able to push rates higher. Right now, it's hard to discern how much of that is due to a segmentation shift. You don't have those large volume accounts and other demands segments that drive concessions. It will be interesting to see how much of the rate push can be sustained as the different segments come back. That's one area of our projections that is expected to take a bit longer on an inflation-adjusted basis—it’s hard to read the tea leaves right now.

THE RECOVERY

INTELLIGENCE November December 2021 | staymagazine.ca | 25

ABOUT

THE LEISURE MARKET IS SHOWING US THAT PEOPLE WANT TO TRAVEL.

I don't think the corporate market is necessarily going to surprise us because it's already surprised us with how long it hasn't travelled. So, when it comes back, it's going to be more of a relief versus a surprise. The surprise was that people stayed off the road a lot longer than we expected them to.

I think the only surprise that would be coming on in terms of top-line would be on the rate side, just because Canada has always kind of been stuck in this occupancy that matches supply with demand. You can see kind of getting to that 66 to 67 per cent nationally and as it pushes above that we see supply added, I think we'll continue with that matching of supply and demand.

The 52 per cent occupancy that we gave you as a forecast, the only thing we know is that we're going to be wrong.

It would be great to see that 50 per cent be, say, 58 per cent as we get into January and corporations go back into their offices and there's not a fifth wave of COVID and people start saying, Okay, I'm much more comfortable travelling, and that boost in occupancy because they're coming back a little stronger than we anticipate.

CARRIE RUSSELL, AACI, MAI, RIBC, ISHC SENIOR MANAGING PARTNER, VANCOUVER

Carrie Russell joined HVS as an associate in 1997. According to HVS, she has been influential in establishing HVS’s presence in Canada as a leading hospitality consulting and valuation firm. Russell has attained designation in both Canada and the United States, having completed the requirements to obtain the AACI designation from the Appraisal Institute of Canada in 2004 and the MAI designation from the Appraisal Institute in the United States in 2012. Russell is a member of the International Society of Hotel Consultants (ISHC), the Real Estate Institute of BC (RIBC) and the Real Estate Council of Alberta (RECA). Russell is a regular speaker at several conferences including the Canadian Hotel Investment Conference and the Western Canadian Lodging Conference.

TOM BECKETT, AIC CANDIDATE MEMBER SENIOR VICE PRESIDENT, VANCOUVER

Tom Beckett is a Candidate Member of the Appraisal Institute of Canada working towards receiving the AACI Designation. Beckett’s work as a hospitality valuation consultant has taken him all over western Canada and north into the territories of the nation, including his hometown of Whitehorse. He has worked on a variety of projects including market studies, feasibility studies for proposed hotels, appraisals of existing assets, and analysis and appraisal of proposed and existing large-scale multi-use developments with a hotel component.

THE EXPERTS INTELLIGENCE 26 | staymagazine.ca | November December 2021

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IMPETUS: GLOBAL CRISES

Rebuilding a sustainable hotel sector

The pandemic continues to impact the way we live—lockdowns, border closures and travel restrictions have been introduced in many parts of the world—leaving the hotel sector as one of the hardest-hit industries.

According to research conducted by McKinsey & Company, the hotel sector’s recovery to pre-pandemic could take until 2023 or even later. But this public health crisis is by no means the only challenge of our time.

We are also faced with the necessity of making imperative changes to our business models, practices and societies around sustainability.

The global climate crisis is a major threat to the existence and future of humanity. Its detrimental consequences have become more apparent in recent years—from extreme weather and displacement to mass extinction of species. In the most recent UN Intergovernmental Panel on Climate Change (IPCC) report, scientists warn that the outcomes of climate change will be continuously magnified and put an urgent call for changes from governments and industries to reduce carbon emissions.

The hospitality sector accounts for at least one per cent of global carbon emissions, and it suffers directly from the impact of climate change. Extreme weather has already started increasing operating costs for hotels and limited travelling to affected regions.

So, what can hotels do to become more sustainable amidst these global crises?

Green Key Global

Green Key Global is a leading international environmental certification body that provides standardized programs and resources for the hotel and meetings industries. The goal of the organization is to promote social responsibility activities and support sustainable initiatives across the sector, helping hotels and businesses to increase occupancy, save money and reduce their carbon footprint.

To get a better idea of what hotel owners and operators should think about right now, we spoke to the director of business development at Green Key, Rebecca Bartlett-Jones. >

There are currently 1,300 hotels certified through Green Key Global across the world.
November December 2021 | staymagazine.ca | 29

Green Key helps businesses in the hospitality sector improve their sustainability standards and practices through an online assessment of every section of the hotel or meeting space.

Businesses can complete the online assessment by answering questions such as: Do you have a sustainability plan? Do you have a green representative? Do you use lowflow toilets? Do you grow your own vegetables? And they will receive an audit report after the assessment.

“The audit report tells them what they’ve done right and gives them a key level of one to five for their sustainability. It also tells them what more they could do,” said Bartlett-Jones.

Once a hotel becomes certified by Green Key’s program, it’s listed on travel booking websites such as Expedia and hotels.com as well as the Government of Canada. This makes it easier for people to make more informed, conscious choices when booking accommodations. There are currently 1,300 hotels certified through Green Key Global across the world.

Bartlett-Jones said getting certified in sustainability creates a win-win situation for hotels: “Our hope is that if they [consumers] want to make a difference, they would choose this hotel. And not only can [the hotels] reduce their carbon footprint, but they can increase profitability and also save money in the way of extra green guests.”

SUSTAINABILITY IN THE HOTEL SECTOR: A BREAKDOWN

Sourcing & supply chain

From food ingredients to housekeeping supplies, hotel owners and operators need to reflect on whether suppliers are local and sustainable. Not only does local produce ensure fresher, higherquality food for guests, sourcing local is also an important way of supporting the local community and fulfilling corporate social responsibility.

Maintaining a transparent and close relationship with one’s supply chain can help hotels make sustainable choices in their products and operation. Hotel management needs to communicate with the suppliers and ask important questions about the ingredients and manufacturing process as well as transportation of the products. What is the carbon footprint of the product? Are their labour practices ethical? Is this the most suitable supplier to minimize the environmental impact of your hotel?

“It is preferred to have your supply chain checked to make sure that they are all certified in sustainability or that you’re buying locally,” Bartlett-Jones added.

Key Global 30 | staymagazine.ca | November December 2021
Green

Do you have a sustainability plan? Do you have a green representative?

Do you use low-flow toilets? Do you grow your own vegetables?

Green Key-certified Alt Hotel Ottawa uses subcontractors for housekeeping and laundry services; the hotel’s commitments to sustainability and Green Key-certification is transforming their supply chain and increasing demand for environmentally conscious suppliers and service providers in the hotel industry.

Design & infrastructure

The design of products and processes can play a significant role in improving sustainability on a systemic level and in the long run. Many hotels now aim for zero waste operation, which can be a loaded term. The Zero Waste International Alliance defines zero waste as:

“... designing and managing products and processes to systematically avoid and eliminate the volume and toxicity of waste and materials, conserve and recover all resources and not burn or bury them. Implementing Zero Waste will eliminate all discharges to land, water or air that are a threat to planetary, human, animal or plant health.”

From composting facility to paperless operation, strategic design can help hotels adopt sustain-

able practices and make them more accessible to guests and staff.

Green Key-certified hotel chain WestCord Hotels installs water savers in showers and taps as well as a water irrigation system that uses rainwater and greywater to water the garden and plants.

Energy consumption

Hotel traditions such as laundry and housekeeping are huge energy sinks and often involve unnecessary cleaning. Some hotels have started to ditch these outdated, wasteful practices and do so with some creativity. Amsterdam’s Teleport Hotel, for instance, gives out free pizza to guests staying for more than two nights without needing their rooms cleaned.

Smart technologies and alternative products help cut energy consumption. Bartlett-Jones said one of the easiest measures to complete for hotels is to replace the incandescent light bulbs with the LED ones. “We have lots of suppliers that we recommend to people to make those types of changes— that saves a lot of money over a number of years and also saves energy.”

The hospitality sector accounts for at least one per cent of global carbon emissions, and it suffers directly from the impact of climate change. Extreme weather has already started increasing operating costs for hotels and limited travelling to affected regions.

Green Key-certified Holloway Lodging Corporation is a publicly traded real estate and hotel management corporation with 26 limited-service and six full-service hotels across Canada. Introducing water conservation measures are a standard part of renovations in Holloway hotels now, such as the installation of low-flush toilets and low-flow showerheads. “They make a huge difference,” Seiler noted, “we use 50 per cent of the water we used to.” And water-cooled walk-in coolers are a thing of the past, he said, “Now we don’t have a single unit in the entire company; we save thousands of gallons and dollars.”

Waste management

Reduce, reuse and recycle are important steps to manage waste and reduce carbon footprint in a household, within a corporation and on a regional level. Waste reduction can be especially challenging for the hotel and hospitality sector since it has historically involved a great deal of single-use packaging and disposable products.

According to data provided by Clean the World and the WHO, two million partially used soap bars are thrown away every day in the United States alone—not to mention all the plastic packaging of toiletries that end up in the landfill and our oceans. In 2019, InterContinental Hotels Group, one of the largest international hotel chains, announced that it will start offering toiletries in bulk-size dispensers by 2021 to reduce plastic waste.

“We had a huge momentum changing from single-use plastics just before COVID,” Bartlett-Jones said, the push for reusables was interrupted by the pandemic as people were more worried about

cleanliness. “Now we know that it doesn’t really spread that way, so we’re going back to diverting single-use plastics.”

Food waste is another major challenge. A study conducted in Germany found that 45 per cent of food waste in hospitality is generated by buffets. Therefore, switching from buffet-style breakfast to order-based meals can be a solution to reduce food waste. More does not equal better.

Social development

Sustainability is not just about environmental management; we can’t talk about sustainability without taking labour practices and community development into consideration. A socially sustainable approach includes ensuring inclusivity and diversity of employees, promoting work-life balance and employees’ wellbeing, supporting the local community and more.

“I think one of the biggest things at the moment is social and corporate responsibility—buying local, making sure that your supply chain is green and then giving back into your community, leftover food, etc. There is a big pillow drive going on at the moment… so there are lots of leaps forward,” Bartlett-Jones said.

For transnational hotel chains that operate in different parts of the world, it is especially crucial that they respect and sustainably engage with local communities. According to the Future of Travel report conducted by Booking.com in 2020, 55 per cent of participants said they want to see how their money is going back into the local community; 67 per cent hoped that their travel expenses contribute to supporting the destination’s recovery from the pandemic.

32 | staymagazine.ca | November December 2021
SUSTAINABILITY IN THE HOTEL SECTOR: A BREAKDOWN

We’re all in this together

As we can see, improving sustainability within the hotel sector encompasses so many di erent aspects—and there’s no one-size-fits-all approach. Getting certified in sustainability by organizations like Green Key Global is certainly a great start, but continuous learning and e ort are required for the hotel and hospitality sector to change for the better.

Bartlett-Jones said mindset is one of the biggest challenges for hotel owners and operators, especially for the older generation who didn’t grow up with the climate crisis: “They don’t see sustainability as important as it should be... So, there’s a little gap there [between them and the millennials] we're trying to bridge.”

Finance is another challenge, especially as many hotels and businesses in the hospitality industry are slowly recovering from the hard-hit of the pandemic. But in a time of climate crisis, there is no denying that sustainability is the future of businesses in all sectors. There are many resources available for hotels to rebuild sustainably and responsibly.

“You need more and more people involved and that’s why corporate social responsibility on the hotel side is so important. The more they put themselves out there as being sustainable, the more the general people in their local area will understand that and promote them,” Bartlett-Jones said. “We’ve got a lot of work to do, [but] it really is happening.”

Amsterdam’s Teleport Hotel, for instance, gives out free pizza to guests staying for more than two nights without needing their rooms cleaned.
November December 2021 | staymagazine.ca | 33

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HOTELS ARE COMING BACK IN MEANINGFUL WAYS

Against the backdrop of the pandemic, these hoteliers found ways to react, respond and even prosper. Resilience, ingenuity, experience, strategy and a little luck—here’s how Gaurav Gupta of Sageblan Investments in Quebec, and Mandy Farmer of Accent Inns and Hotel Zed in British Columbia, not only adapted their businesses during the pandemic but managed to do well.

GAURAV GUPTA

President, Sageblan Investments Montreal, Que.

HOW DID YOU GET INTO THE HOTEL INDUSTRY?

Since a young age, I’ve had a passion for real estate, architecture and design. For the last 10 years, I’ve been working at my family company, Sunray Group, which is a hospitality and development firm. I worked alongside my uncle, Ray Gupta, who grew the company from one hotel in 2006 to 55 hotels currently. I was very much a part of the growth, working on everything from operations to construction and staffing.

WHAT INSPIRED YOU TO CREATE YOUR OWN COMPANY?

For the last five years, I have been working on my family company’s Montreal portfolio. I felt very connected to the city and saw a huge runway for growth. My friends, Anil and Bleda Basegmez, who also come from a family background of real estate and hospitality, also felt very aligned with Montreal. So, we joined forces and created Sageblan Investments in June of 2019. Our model is to buy underutilized, mismanaged assets, apply the right capital and reposition these assets to more appropriate brands.

TELL ME ABOUT YOUR PROPERTIES

Our first project was a 127-key hotel in Salaberry-de-Valleyfield [an hour west of Montreal]. It was built in the 1900s as a cotton mill. We thought it would be a great opportunity to bring back an older building with a fresh, avant-garde design. From there, we purchased three other assets in 2019 and 2020. The Hotel Place Dupuis in Montreal has 354 rooms and we’re converting it to a Hyatt Place with $25

million in renovations. In late 2019, we finalized agreements to purchase the Vogue Hotel in downtown Montreal and the Delta in Quebec City. In 12 months, we acquired over a thousand rooms, worth about $140 million, with another $40 in renovations planned, and we were getting ready to hire about 450 people.

WHAT HAPPENED WHEN COVID HIT?

In all transparency, it was a very, very tough experience. In March 2020, we started to receive our first cancellation notices of group bookings at the Hyatt Place. That’s when things got very real. We also had two acquisitions on

We also had two acquisitions on the go.
To close those transactions during COVID, we had to really build our relationships with our lenders.
Gaurav Gupta
November December 2021 | staymagazine.ca | 37

the go. To close those transactions during COVID, we had to really build our relationships with our lenders. That was one of the biggest challenges. Lenders were not moving forward with financing for most hospitality assets during COVID. But I would say, in all humbleness, that the lenders could tell the strong operators from the weak ones. They knew what our mission and vision were for these assets. They had trust in our abilities. Strong partnerships are built during tough times.

HOW DID YOU MITIGATE LOSSES DURING THIS TIME?

We were creative in finding solutions during the interim. We reached out to our members of parliament to see if there were any opportunities for different housing initiatives. We were able to secure long-term government contracts that allowed us to fill up our assets during depressed times of business. We provided additional capacity for hospital beds in the initial stages of the pandemic when hospitals were getting too full. We housed new immigrants and asylum seekers. We worked with a women’s shelter to help keep people off the streets during the winter.

IN LIGHT OF THE PANDEMIC, WHAT ARE SOME CHANGES OR ADAPTATIONS YOU’RE BRINGING TO YOUR PROPERTIES?

We’ve enhanced our guest experience by doing mobile check-ins. We’ve made sure that all of our locks are Bluetooth-enabled. Your room will be assigned to you pre-check-in, so you’ll get a message on your phone and you can enter your room that way. We have designed fewer touchpoints and interactions with people when

you don’t need to have them. We have paperless directories in the guest room. We have military-grade clean air and clean water technologies throughout our properties. I think that having these systems installed in our hotels will allow us to secure more business in the future.

WHAT DOES THE FUTURE LOOK LIKE FOR YOUR COMPANY, AND THE HOTEL INDUSTRY IN CANADA?

Travel, and the need for hotels, is going to be coming back in a meaningful way. We’re starting to see a good amount of leisure travel, especially as the borders open up from the U.S. and internationally. But the one thing that’s still not back yet is business and corporate travel, which we hope to see more of in 2022 and 2023. We’re nowhere close to where we need to be, but it’s nice to see some regained confidence and consumer travel.

We were able to secure longterm government contracts that allowed us to fill up our assets during depressed times of business. We provided additional capacity for hospital beds in the initial stages of the pandemic when hospitals were getting too full. We housed new immigrants and asylum seekers. We worked with a women’s shelter to help keep people off the streets during the winter.

38 | staymagazine.ca | November December 2021
MANDY FARMER President & CEO, Accent Inns and Hotel Zed Victoria, B.C.

We were so scrappy. When everyone was laying off people, we decided to hire. We hired more salespeople to chase after business. We were determined that we were going to fight. It really paid off.

HOW DID YOU GET INTO THE HOTEL INDUSTRY?

It’s a family business. My grandfather, George, started a construction company in 1951. Then in 1986, my dad, Terry, took one of the construction yards where we stored cranes and turned it into the first Accent Inn. I started working for my dad straight out of university. It was just so much fun that I kept doing it. He and I worked extremely well together. Eventually, I took over from him in 2008. In 2014, I opened the first Hotel Zed. It’s a brand of nostalgic, rebellious motels and hotels that are both renovated and purpose-built. We opened our second Hotel Zed in Kelowna in 2016. I still oversee our five Accent Inns. We were getting ready to open our third Hotel Zed in Tofino when the pandemic hit.

WHAT WENT THROUGH YOUR MIND WHEN THE PANDEMIC HIT?

I really thought I was going to lose my family’s business. My grandfather’s company and my dad's company— the weight of all that rests on my shoulders. That clarity of, ‘Oh boy, we’re going down’ made me think about how I wanted to go down. I wanted to do it with my head held high, and I wanted to be proud. So, from that moment, we were going to extend help to anyone we could, whether that was inside or outside

our company. We decided to lead with love and make decisions based on how many people we could help.

HOW DID THAT MANIFEST ITSELF IN YOUR BUSINESS?

We thought, immediately, who can we help? First and foremost, I wanted to take care of our team. We immediately issued $250 grocery gift cards for our 250 employees. We were heading into something big, but I wanted the team to know, ‘I’ve got your back. And I don’t want you to worry about putting groceries on your table, I’m going to help you.’ We started hearing about nurses sleeping in their cars because they were afraid to bring the virus back home. We introduced a first responder rate and raised hundreds of thousands of dollars with the United Way so that we could have them stay with us for free. It kind of snowballed from there.

We worked with elementary school kids to write love letters to these first responders, letting them know that we cared about them. We had other businesses drop off meals for first responders. It was a really lovely thing where we took care of these people who were taking care of others.

DID YOU HAVE TO DOWNSIZE YOUR TEAM?

We were so scrappy. When everyone was laying off people, we decided to hire. We hired more salespeople to chase after business. We were determined that we were going to fight. It really paid off. The team was amazing. We just started throwing anything and everything at the wall. We got really creative. And before you knew it, things were happening. I think we were one of the first hotels to convert into office spaces. We offered

40 | staymagazine.ca | November December 2021

this at Kelowna Zed and Victoria Zed. Not everything was money-making. At Hotel Zed, we have a fleet of vintage vehicles. Back when kids couldn’t have birthday parties, we’d do these party parades and drive our vintage vehicles past the kid’s house and play music, honk and make noise. We got no money out of that. We paid our team to do that. But it felt awesome.

HOW DID YOU BALANCE YOUR BOOKS DURING THE PANDEMIC?

It was knocking on any door. Instead of asking for business, we were asking, ‘What can we do to help?’ That led us to work with the B.C. Health Authorities (BCHA). If someone comes to the border and doesn’t have a good quarantine plan, then they get a two-week stay at one of our hotels. We had room blocks with the BCHA at our Accent Inns in Richmond and Kelowna. That helped to carry us through the pandemic.

WHAT HAPPENED WITH THE NEW HOTEL ZED?

We were supposed to open in June 2020 but we were delayed to August 2020. It was my first new build, and it’s my fantasy hotel. It was absolutely amazing to see my vision come true. That being said, it was also nerve-

wracking because in Tofino, you make money during the summer months, and we pretty much missed out on those months. Then we immediately headed to a travel ban. Our property was empty. So, we reached out to the First Nations community. They were at risk of spreading the virus and they were very, very concerned about their health. We opened it up to them, saying, if you are at all concerned, stay with us for free. We had a number of families stay with us and it was lovely. Now we have an amazing relationship with the Tla-o-qui-aht First Nation.

WHAT DOES THE FUTURE LOOK LIKE FOR YOUR HOTEL, AND THE HOTEL INDUSTRY IN CANADA?

It looks really, really optimistic. I’m so proud of our team. They’re amazing. I think our company culture is driving numerous opportunities for us to grow. I think that Canadians are excited to travel again. There’s a lot to be grateful for and there are lots of opportunities out there. I think that local leisure travel looks amazing. But we still really need to get the border open and get our international travel back. We need to see conventions come back. Until we see that, it will be challenging.

WHAT PANDEMIC-ERA ADAPTATIONS WILL YOU MAKE A PERMANENT PART OF YOUR OPERATIONS?

Leading with love, 100 per cent. We will always continue to help people. It’s a good way of doing business. Same with putting our people first. I can honestly say that my team is my number one priority. And that’s ahead of my customers. I will forevermore operate like that.

In 2014, I opened the first Hotel Zed. It’s a brand of nostalgic, rebellious motels and hotels that are both renovated and purposebuilt.
November December 2021 | staymagazine.ca | 41
Mandy Farmer

RE FRAM ING RELA TION SHIPS

42 | staymagazine.ca | November December 2021

I was born into Canada’s hospitality industry. My grandfather was a hotelier and restaurateur. He owned and operated hotels and restaurants in Vancouver, B.C., in the early and formative years of my life. His was the generation that understood the intimate and interdependent relationship between hotels and restaurants. More pointedly, he understood the relationship between hoteliers and restaurateurs as collaborators in what he always described as the most exciting business in the world.

These days, from my vantage point, we are much more divided. We even argue over the identity of our broader industry: Are we hospitality? Are we tourism? Or are we merely businesses?

I believe we run the risk of creating greater divisions between those who own and those who operate.

But all is not lost.

To reflect on the present day is to feel and attempt to understand the anguish of labour-market pressure on the Canadian hotel sector. We’ve done studies, provided commentary and proposed solutions. But I’m not sure anyone has yet managed to gain enough perspective to understand the depth of the workforce crisis this industry is facing. And if we are being honest, this did not come as a surprise. Very much like climate change, we have all been witness to the slow depletion of one of our most essential and unrenewable resources—our people. This is not to paint an entire industry with the same brush. Many organizations and regions across Canada have done incredible work to recruit, retain and empower their talent. But we must consider human capital in our industry from a macro point of view. We have a problem. And it will not resolve itself.

In late September I was fortunate to attend the Ontario Snow Resorts Association annual conference. I spoke to three groups of resort leaders from varied levels and regions to help them cope with the recurring labour challenges affecting them all. I couldn’t come to the conference with a silver-bullet solution. I had no tricks or secret pools of talent they could rapidly tap into. Instead, I decided to help them develop their leadership practices in the hopes that they would build even more resilience—the strength and speed of their

November December 2021 | staymagazine.ca | 43

RE FRAM ING RELA TION SHIPS

responses to adversity. What matters most is that leaders during times of disruption have the courage and capacity to stand tall, and the emotional intelligence to support the workers they already have as they rebuild their teams.

Reading the faces and hearing the sentiments from hotel industry professionals who remain engaged in their careers provided clarity on the impact this labour crisis is having on them from a mental health perspective, and a capped capacity perspective. But following the same approach with those hotel industry workers who—by their own volition or because of their employer—made an exit from the hotel workforce over the last 18 months, what is evident is that most of those who left the industry during the pandemic are deeply hurt.

No one should fault businesses that had to take drastic and evasive action to survive this global health crisis by laying off or terminating staff. Associations and industry leaders worked tirelessly to lobby governments for aid and sustainable support. But no amount of money or training, nor incentives, will reel a group of people back into an industry they feel they’ve been abandoned by. And, the recurring rhetoric suggesting that “affected workers would rather just stay home and collect government assistance than return to work” has only deepened the schism. This was, at our peak, a very hardworking workforce in a very demanding industry. Being accused of being lazy or entitled, with so little acknowledgment of systemic deficiencies and injustices in the industry, has only created more distance between workers and industry.

Where do we go from here?

We ought to think about the hotel industry labour crisis as akin to a very damaged relationship. We would be wise to recognize that there is no going back. Today, we are presented with the opportunity to not only build back better, but we must build back differently.

We need to get back to basics. Such as employing early talent strategies around making the hotel industry a destination

44 | staymagazine.ca | November December 2021

for careers and career development; a more pronounced focus on people-first workplace cultures; developing our emotional intelligence and the emotional and social skills of our team members, such as empathy, which is a skill that we all need during this crisis.

For many at the top of the hotel industry, we arrived where we are because we started with an understanding of our passion. And we aligned that passion with opportunity. The industry needed passionate, career-minded hotel industry professionals then as much as we do now. Other industries have surpassed our value proposition for career decisions. Generally speaking, college and university enrolment in hospitality and tourism programs across Canada is in a state of steady decline. Even more so from the domestic student base. The alarm bells should be ringing. And the reimagining should be well underway. We need new solutions. We need new approaches.

I remain an optimist. I remain a big believer in the potential of building rich and rewarding careers in Canada’s hotel industry. Let’s learn from our recent past and grow towards a more positive, inclusive and diversity-rich future. Let’s learn from our long history. And let’s reinvent our workforce grounded as an industry of collaborators in what I’ve always described as “the most exciting business in the world.” >

RE FRAM ING
November December 2021 | staymagazine.ca | 45
This was, at our peak, a very hardworking workforce in a very demanding industry. Being accused of being lazy or entitled, with so little acknowledgment of systemic deficiencies and injustices in the industry, has only created more distance between workers and industry.
RELA TION SHIPS

Tools and Resources

Human Capital and Early Talent Strategies

Tourism HR Canada is a pan-Canadian organization with a mandate aimed at building a world-leading tourism workforce. It facilitates, coordinates and enables human resource development activities that support a globally competitive and sustainable industry and foster the development of a dynamic and resilient workforce. The organization works with the industry to attract, train and retain valuable tourism professionals by giving them the tools and resources they need to succeed in their careers and entrepreneurial endeavours. They are a wealth of resources to help hotels with recruitment, retention and human capital strategies, including their newly launched Propel program. The Propel Student Work Placement Program off ers tourism and hospitality employers access to up to $7,500 in wage subsidies when they hire a post-secondary student for workintegrated learning: an internship, a co-op placement, a work experience placement and more.

For more information visit: https://tourismhr.ca/programs-and-services/propel-studentwork-placement-program/

Combining People and Profit Practices

Conscious Economics is a national not-for-profit organization and global social enterprise headquartered in Canada, with a 10-year history and proven track record in economic education, financial literacy programs, research, events and experiential learning. They have staged over 1,000 events that have gathered youth, business leaders, policymakers, change agents, educators, industry associations, charities and not-for-profits. While they engage with all communities, they maintain a specialized focus on vulnerable populations, including BIPOC, LGBTQ+, Women and Artists. They off er impactful programs focused both on people and profit.

For more information visit https://www.consciouseconomics.ca/

Indigenous Inclusion

The Indigenous Tourism Association of Canada (ITAC) is a global leader in the marketing and development of Indigenous tourism experiences. ITAC’s members are Indigenous-owned and controlled businesses from every province and territory in the country. Intentionally including Indigenous people as part of the hotel industry provides a wealth of leadership and growth potential.

For more information visit: https://indigenoustourism.ca/

RE FRAM ING RELA TION SHIPS

46 | staymagazine.ca | November December 2021
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INNSIGHTS

wclc | western canadian lodging conference

LIVE & VIRTUAL

November 15 – 16, 2021

Taking place in-person at the Westin Bayshore - Vancouver

cdnlodgingconference.ca

wclc is Western Canada's premium hotel investment conference of the year. This year, wclc is a hybrid in-person and virtual event.

CURRENT EVENTS + DEBRIEFS

#WCLC2021 SPEAKERS

Joe Baker Publisher and Co-Owner STAY Magazine Robert Pratt President and CEO Sandman Hotel Group and Sutton Place Hotels Jeff Hyslop Senior VP, Asset Management InnVest Hotels Aaron Bowler Partner Borden Ladner Gervais LLP Nicole Nguyen Director CBRE Hotels Greg Kwong EVP & Regional Managing Director (Alberta) CBRE Hotels Mike Bobbitt Vice President, Franchising and Development Superior Lodging Corp. Jervis Rodrigues Partner | Advisory Services Leader BDO Canada LLP Stephanie Gadbois CEM | Managing Director Big Picture Conferences Inc. Hamir Bansal Vice President Hotels Colliers International Hotels Ingrid Jarrett President & CEO British Columbia Hotel Association (BCHA) Leonard Brody Business and Technology Visionary Ryan Laurie Director of Asset Management Pomeroy Lodging Jiri Rumlena President SilverBirch Hotels & Resorts Gandeephan Ganeshalingam VP of Procurement and Supply Chain WestJet Carrie Russell Senior Managing Partner HVS Martin Stitt Senior Vice President Operations - Canada Hotel Equities Susie Grynol President & CEO Hotel Association of Canada Jason Wight AACI | Senior Vice President | Partner Icon Capital
48 | staymagazine.ca | November December 2021
Cameron Woof AVP, Hotels & Syndication CWB Franchise Finance

STAY Magazine is published by Big Picture New Media, 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. Combined with these conferences, Stay Magazine leverages 25 years of curated hotel intelligence for our readers and advertisers.

Every issue of STAY will include INNSIGHTS—where you will get the latest intelligence debriefs from recent events, as well as a current roster of upcoming events in the hotel sector.

Hotel Association of Canada Conference

Royal York March 2-3, 2022

hotelassociation.ca

The Hotel Association of Canada (HAC) is the leading voice of the Canadian Hotel & Lodging industry, bringing legislative solutions to industry challenges. HAC delivers targeted advocacy for fair rules for the sharing economy, to address Canada’s hotel labour shortage, and for sustainability solutions for the hotel industry across Canada.

HC2 - Hotel Capital Connection:

A summit where hotel owners meet lawyers and lenders

Spring 2022

hotelcapitalconnect.ca/2021

Recognizing the need for a “made-in-Canada” event and responding to popular demand, Big Picture Conferences is pleased to present Hotel Capital Connection (HC²), an exclusive networking and educational event that matches Canadian hotel owners with top legal and financial advisors.

Designed to provide C-Level (CEO, COO, CFO) hospitality executives with the resources, knowledge and vision to help make better investment decisions. HC² explores current issues impacting the hotel investment community and future opportunities through indepth, interactive workshops that are led by Canada’s most trusted legal and financial firms.

This event is planned with designated time and space throughout the afternoon to meet with significant deal makers and conduct business.

CHIC - Canadian Hotel Investment Conference

Sheraton Toronto Centre

April 5-6, 2022

hotelinvest.ca

Since 1997, the Canadian Hotel Investment Conference has established itself as the definitive source for information, insight and opinion on today’s Canadian lodging market. For senior executives from across North America, this business conference delivers outstanding insight on where the industry is today, where its heading and the options it can deliver. 2021 was the 25th anniversary of CHIC!

November December 2021 | staymagazine.ca | 49

Access up to $7,500 in wage subsidies

The Propel Student Work Placement Program supports tourism and hospitality employers in offering post-secondary students paid work-integrated learning opportunities.

propelcareers.ca

Engage early talent and provide valuable experience. Applications are open for placements anytime between June 1, 2021, and March 31, 2022. Visit propelcareers.ca

propel@tourismhr.ca

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