The most perishable product any hotel sells is a single hotel room for one night. It has to earn money that one night and that night only. The same inventory that it had the night before cannot be rolled forward to the next night and then sold at a lower rate the following night. An unsold room for one night becomes permanent lost inventory that can never be sold as any other product can.
We all know this; we can state the matter in budget meetings and then continue to run our hotels to manage a set of numbers that make good copy for a spreadsheet, not a profit.
This past summer in BC is one clean example of what I mean by this.
The World Cup math nobody wants to run
CoStar reported that Vancouver’s average daily hotel rate during the World Cup month reached CAD $406.34, up 21.3% from the same month a year earlier. However, occupancy fell to 73.2%, a year-over-year decline of 15.8%. As a result, revenue per available room (RevPAR) rose just 2%, leaving much of the tournament’s potential to drive room sales unrealized.
Two percent. During a World Cup. In a city that spent three years telling everyone it didn’t have enough rooms.
In the months leading up to the World Cup, many warning signs existed that tourism metrics for the city were not going in the right direction. Demand for hotel stays in Vancouver was tracking at only 1% yr-over-yr growth in the lead up to the tournament, last among all host cities, while Toronto demand was growing at 17%. Destination Vancouver CEO Royce Chwin wrote in late May that June bookings were coming in about 20% below last year’s levels in a special report published by The Vancouver Sun. Post tournament, CoStar wrote that “Vancouver, a World Cup market, continued to struggle” in their end of tournament review of hotel metrics for June.
Those June room nights are gone. Not deferred. Gone.
We priced for a market that didn’t show up
I would differ from this characterization with a demand problem, though. It is a forecasting problem presented as a pricing strategy. All five of the things that actually affect room nights (price, distribution, marketing, demand, service and amenities) are under your control.
The key factors that can lead to an empty room are pricing, distribution, marketing, demand, image, and guest experience. Of these, five are within our control. The rate we set, the channel mix we choose, the message we send to customers and the experience we create for our guests – all of these impact whether we get a second night’s stay from a guest or not.
BC is a strong hospitality market with solid fundamentals, reporting a record 70.4% occupancy in 2025, followed by an average daily rate of $257.03 and a revenue per available room of $180.92 for the year, making it the strongest market in the country. On a major market basis, Vancouver ranked #1 for RevPAR at $223.05 in 2025. Tourism in BC creates $23 billion in gross revenue, supports $8 billion of GDP, and 113,000 jobs. The issue in the hospitality market today is whether hotels are being managed to capture demand or simply waiting for it to show up.
What an empty room actually costs
More than the rate you didn’t get.
The late acquisition cost of a room is so much more than the rate not attained. In Kalibri Labs’ research acquisition cost is 15–25% of guest-paid revenue with some hotels reporting up to 35% and online travel company (OTA) business to demand up to 6.5 times the investment than a direct booking.
Then, there is the compounding effect of continuing to offer last minute rate reductions to individual travelers, allowing them to wait and see, eventually, to book at lower rates. It is only when hotels are full of late-arriving guests that sales teams can remind their corporate, group, association and sports accounts that it’s time to lock in at the pre-agreed rate – ideally before these alternate channels of distribution attempt to cap the margin on their own bookings of the same rooms.
What sales teams do about it on Monday
Three things, and none of them are new.
The shortening of the guest booking window is also something that needs to be addressed by your revenue and sales meetings. STR reported that two-thirds of rooms are booked within the last month and nearly a third within the last week. If your current pace reports are based on a 60-day window, then you’re merely reviewing yesterday’s weather.
Target high value groups that commit well in advance. Groups such as corporate, associations, and meetings are great to target as they are able to commit to a block of rooms several months in advance thereby mitigating against soft nights in the hotel.
Protect your relationship and your margin. Every direct booking is a booking of rooms that you would otherwise have rented out to others. This doesn’t necessarily have to be an anti-OTA stance. It’s simply smart mix management.
Vancouver has faced a hotel room shortage for years. Destination Vancouver has long advocated for adding 20,000 rooms across Metro Vancouver by 2050, as outlined in its hotel supply study. Yet even when demand outstrips supply, an empty room last night costs exactly the same as an empty room tonight: every dollar it could have earned.
A hotel room gets only one night to generate revenue. Either you fill it or lose it forever.
Empty rooms don’t carry over. Good conversations can. Reach Brent O’Connor at brent.o@telus.net.