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Tourism Victoria unfazed by loss of 300-plus hotel rooms to residences

The loss of hotel rooms in the midst of a tourism boom should not be considered a crisis, according to the head of Tourism Victoria.

The loss of hotel rooms in the midst of a tourism boom should not be considered a crisis, according to the head of Tourism Victoria.

Paul Nursey, chief executive of the destination marketing organization, said the imminent loss of more than 300 rooms in a city that is seeing average occupancy in excess of 75 per cent last year is no cause for concern.

“[Losing older hotels] is healthy and should happen,” he said. “It is very expensive to keep an old property to the level of amenity demanded by today’s traveller, and there are higher and better uses of the land than an old-school, drive-in motel.”

Owners of the Harbour Towers Hotel & Suites in James Bay have confirmed they have applied for rezoning to convert the 12-storey building from a 189-room hotel into a 219-unit residential tower.

GMC Projects has bought the 123-room Econo Lodge & Suites along the Gorge Waterway with the intention of converting it to residential.

And the Admiral Inn on the northwest end of Belleville Street remains the subject of a development permit that would see the existing hotel demolished in favour of an eight-storey, 35-unit apartment building.

Those three are just the latest hotels to consider the switch to residential. In recent years, the city has lost rooms at hotels such as the Queen Victoria, Traveller’s Inns, Dominion and others to either rental accommodation or social housing.

“We have the Harbour Towers through this season at minimum, so we won’t start to experience supply pangs until high season July-August of 2018 at the earliest,” Nursey said.

And he argued that Victoria remains a good deal.

“Victoria is still very competitive in terms of price. We are only nosing ahead of the Canadian average, which includes every small town in Canada,” he said. Victoria’s average daily room rate last year was $154, while the Canadian average was $149. Greater Vancouver reported its rate for last year was $178 and downtown Toronto was $200.

Nursey said that historically, Victoria’s hotel room prices have been low and the new rate is a sign of how far the local industry has recovered.

“Our recovery has been very robust. But, honestly, we are just now taking our rightful place in the pricing pecking order,” he said.

Margaret Lucas, general manager of the Hotel Rialto, said the loss of the Harbour Towers is a concern, but she said renovations at the Empress and Grand Pacific will be done before the summer. That will add hundreds of hotel rooms to the mix that were out of play much of last year.

“Those rooms will be back online, and what that will do is it will get us back up a bit and make up for the [eventual] loss of the Harbour Towers,” she said.

Nursey said the millions of dollars pumped into hotel renovation over the last several years are paying off.

“Our core product has been renovated very nicely and we have a very strong product offering,” he said.

“Some other destinations have let their product rust out due to lack of renovations. That is not the case here.”

It seems to be having an effect. Lucas said advance bookings suggest this year is shaping up to be just as strong as 2016.

“Things are amazing. The bottom line is we have not seen these numbers that we are all experiencing — and I mean all of us, not just one or two — in years,” she said. “While the going is good, we will take it.”

The Econo Lodge, which was listed for sale at $6.25 million, will be converted to a 97-unit apartment complex, said GMC Projects president Jordan Milne.

The company has submitted a rezoning application to Esquimalt and intends to establish a restaurant, upgrade the waterfront pool and cottages, and add new amenity space.

As for the Admiral Inn, while many in the surrounding area expect a closing could happen this year, there has been little indication as to when the 56-year-old hotel will undergo its conversion to a residential building.

A development permit for the project, originally granted in 2011, has been extended twice. It is due to lapse in 2018.

The plan would see the existing motel demolished and replaced with an apartment building.

Neither the architects working on the project nor the proponent could be reached for comment Monday.

aduffy@timescolonist.com