Vancouver’s looming hospitality crisis
A recent study, “Economic Analysis of Hotel Supply and Projected Demand in Metro Vancouver, 2023 to 2050”, released by Destination Vancouver, paints a bleak picture for the city’s hospitality sector.
A deficit of 20,000 hotel rooms, with 10,000 specifically in Vancouver by 2050, will result in considerable economic loss for the province of British Colombia if the gap isn’t bridged. From 2022 to 2050, $30.6 billion in output is predicted in loses, $16.6 billion in GDP, over 168,000 full-time equivalent jobs and $7.5 billion in tax revenue.
The inadequacy of the current hotel supply
In comparison to other cities with a similar global standing, Vancouver has been lagging in new hotel constructions. This stagnation coupled with a reduction of about 2,000 rooms since 2010 in Metro Vancouver, makes meeting the rising demand a daunting task. The pandemic further exacerbated the situation with an additional 550 rooms withdrawn from the city’s inventory for supportive housing. The looming problem becomes evident considering that by 2040, every month of the year will witness demand exceeding supply across Metro Vancouver if current levels persist.
The urgency for new investment and development
Despite an interim hotel development policy passed in 2018, Vancouver’s struggle to match supply with demand highlights the need for significant investment. Current development applications and permits do not meet the losses, and the estimated 1,100 new rooms in the pipeline through 2026 are not a guaranteed solution. The lack of hotel room availability threatens Vancouver’s global competitiveness and risks higher prices for visitors. Moreover, this scarcity could discourage potential tourists from visiting the city altogether, causing a ripple effect of economic loss across the smaller towns and cities in the region. To avoid such a scenario, it’s crucial to expedite the process for new hotel developments and strategise more inclusive, long-term solutions.
The hotel room deficit in Metro Vancouver necessitates urgent attention and significant investment to bridge the gap between supply and demand. Failure to act promptly could compromise Vancouver’s global attractiveness and have far-reaching economic implications for the entire province.