Skip to content
Join our Newsletter

Vancouver’s hotel crunch set to drive up room rates

Two new Sonder hotels are in the works, including one 66-unit project near Denman Street
The digital-hotel chain Sonder is renovating space on Comox Street near Denman Street to replace what was meeting space into a 66-unit hotel | Chung Chow

A record 6.14 million international visitors are expected to visit B.C. this year, but the number of available hotel rooms is not keeping up – particularly in Vancouver.

Tourism officials, such as Tourism Vancouver CEO Ty Speer, acknowledge that this imbalance is pushing up room rates, but they stop short of suggesting that higher prices will diminish the tourist experience.

“A huge percentage of our visitors, especially those coming from offshore, are not coming here for the second time and necessarily saying, ‘I stayed at this hotel last time and I paid X, and now I’m coming and staying in the hotel and I paid Y,’” Speer said. “I don’t think that’s terribly common.”

He added that the Canadian dollar’s low value, when compared with the U.S. greenback, continues to put Vancouver in a strong competitive position for price-conscious visitors if the alternative is a city such as San Francisco.

It has been harder for Vancouver to lure Australians, however, because that country’s currency has tumbled in comparison with the Canadian dollar. Historically, the Canadian and Australian currencies tend to be valued similarly, but recently the Canadian dollar has been worth about $1.11 in Australian dollars.

Forget also attracting Argentines, given that their currency has fallen more than 20% against the Canadian dollar in the past month.

Vancouver’s diminishing number of hotel rooms has been a trend for a while now.

City of Vancouver statistics show that the city in mid-2018 had 13,925 hotel rooms, or 1,105 fewer units than it did a decade ago. Those lost rooms include the 626 suites in the former Empire Landmark and Coast Plaza Stanley Park hotels, which both closed in recent years.

Speer expects that when the 372-room Four Seasons Hotel closes at the end of January 2020, no new hotel will take that space.

Landlord Cadillac Fairview did not return phone calls from Business in Vancouver to confirm what it plans for that space at 791 West Georgia Street.

One bit of good news for the sector is that digital hotel operator Sonder has been renovating former convention space adjoining the 31-storey former Coast Plaza building. The tower is separately being renovated to include 316 rental units.

However, people who enter above the Denman Place Mall at 1771 Comox Street early next year are expected to be able to enter Sonder’s three-storey, 66-unit hotel.

“It’s a bit of a strange building,” Sonder’s general manager for Vancouver, Emma Cahalane, told Business in Vancouver.

“If you go in from Comox, the first thing you see is the mall. Then you come up one level and that was the old conference area. We have our own entrance, own elevator and own complete access.”

Sonder launched in Montreal in 2012 as a short-term rental company similar to Airbnb. It has since morphed its business model to be a digital hotel, which means that all guests book rooms online and the lion’s share of interactions with hotel staff are online. If they need extra towels, for example, they request them via a smartphone app – same thing if they want their sheets changed.

Sonder’s plan is to take single floors in mixed-use buildings or multiple floors if there is sufficient demand.

Earlier this year it announced that it had partnered with Vancouver developer Coromandel Properties to lease five floors of the historic Arts and Crafts Building at 576 Seymour Street after renovations are complete, which could be by next spring.

Delays in city permitting may push the launch date further into 2020, Cahalane said.

That 36-unit hotel will be based on the upper four floors of the six-storey building with Sonder’s regional head office and a lounge on the second floor.

Cahalane said that Sonder’s Comox Street hotel will also likely have some staff on site to help customers but that most interactions will still be via the smartphone app. •

[email protected]