While the tourism industry continues to show strength, labour shortages and short-term rentals are having a dampening effect on some of its operators, according to hospitality industry consultants Chemistry Consulting.
Frank Bourree, Chemistry principal, said that while the industry continues to see increased traffic and visitation to the region, hotel occupancy has been down the last two months and some restaurants and hotels have struggled to find staff.
“At this time of year, we were expecting a slight bump in hotel occupancy because of the displacement of people in the Interior of B.C., and that may still show up in the July numbers, but there is an interesting trend here,” Bourree said. He noted that while the airport and B.C. Ferries have reported increased traffic volumes, hotel occupancy dropped 1.84 per cent in June compared with May.
Bourree said that’s the second month in a row hotel occupancy has fallen, while visitation has increased.
“Where are these people staying?” he asked.
Bourree believes an increase in short-term rentals is at least part of the answer.
According to figures Chemistry released Wednesday, hotel occupancy through the first half of this year is down 0.79 per cent to 71.17 per cent compared with last year. At the same time, revenue per available room has jumped $4.43 to $107.84.
Ferry traffic between Tsawwassen and Swartz Bay has increased 0.6 per cent year over year, while passenger traffic is up 0.15 per cent. Victoria International Airport has seen a 6.23 per cent increase over the first six months of this year.
Bourree said the crush of visitation and a buoyant economy — the unemployment rate in Victoria is 4.1 per cent, the third-lowest in the country — has put pressure on operators.
“Labour shortages, especially cooks and chefs, are becoming impossible to ignore as businesses across B.C. are making difficult decisions about reducing hours of operation and or services because they don’t have enough staff,” Bourree said. “Cooks and chefs are rare as hens’ teeth.”
Bourree said the fallout is that small operators will struggle against the big chains that pull in more revenue and tend to pay better. “The little guys will have to be innovative,” he said.
At the same time, hotel operators are enjoying strong revenue.
“A lot of them were [charging] under market [rates] for a long time. Now many of them are stepping up,” Bourree said, noting some high-end properties are charging close to the rates seen in Vancouver and Seattle.
“And that’s good. A lot of these guys like the Fairmont Empress and Grand Pacific have extensively renovated and need to recover their investment,” Bourree said. “And right now there is a demand for it.”
There has also been increased demand further up the Island.
Nanaimo hotels have reported a 3.1 per cent increase in average occupancy through the first six months of this year. Occupancy is currently at 68.9 per cent while revenue per available room has increased $5.90 to $84.24.
“We still expect a record year for Nanaimo’s tourism industry,” said Bourree, though he warned that it is also facing labour shortages, which could have an impact on its ability to fully leverage the potential of this year’s tourism activity.
