Our hospitality sector, comprised of over 2,300 hotels, motels, and inns, form the foundation of British Columbia’s vibrant $22.3B tourism industry. These establishments, many of which are family-owned, play a crucial role in the social and economic fabric of our communities. With hotels alone contributing 3.5-4.0% to B.C.’s economic activity, their impact is far-reaching. Through collaborations with marketing partners and investments in destination development, hotel owners are catalysts for meaningful economic growth, driving the well-being for our entire province. Government support for the industry is critical as it helps stimulates economic growth, boosts tourism promotion efforts, and creates diverse employment opportunities across various skill levels. By addressing challenges, attracting skilled workers, and investing tourism dollars wisely, we can forge a thriving and sustainable future for British Columbia’s hospitality sector, together.
To promote sector growth and meet demands in underbuilt communities, our key recommendation is to introduce a tax relief incentive for hotel construction and initial three years of operation for multi-purpose hotel builds such as commercial, hotel, residential in one envelope. Removing obstacles to investment is vital for the economic well-being of our province and the expansion of our thriving hospitality sector.
The projected increase in Canada’s tourism demand from $80B to $134B by 2030 presents a significant economic opportunity for our province. However, the current lack of hotel capacity in BC’s cities and communities poses a pressing challenge. A recent report from Destination Vancouver emphasizes the potential economic impact and job opportunities at risk if the demand for hotels exceeds the available supply, with the City of Vancouver alone facing billions in unrealized economic impact and thousands of unfulfilled full-time jobs.
To address this issue, we propose introducing a tax relief incentive to encourage potential investors and developers to undertake new hotel projects. This incentive would increase hotel capacity, effectively meeting the needs of underbuilt communities, and create an investment-friendly environment for the hotel sector.
The benefits of this tax relief extend beyond the construction phase. By providing tax relief during the initial three years of operation, new hotel establishments can achieve financial stability, establish their presence, attract customers, and optimize their operations. This support during the critical early years enables hotels to thrive and contribute to the economic growth of their respective communities and also provides affordable housing options.
Furthermore, this incentive aligns with our province’s long-term sustainability goals. New hotel constructions can incorporate eco-friendly practices, energy-efficient technologies, and sustainable design, promoting environmental well-being and responsible tourism development.
In conclusion, introducing a tax relief incentive for hotel construction and the initial three years of operation is a strategic approach to promote sector investment and growth, address the demands of underbuilt communities, and capitalize on the economic opportunities presented by the projected increase in tourism demand. By incentivizing hotel investment and supporting sector growth, we can generate employment, stimulate economic prosperity, and contribute to the sustainable development of British Columbia.
We recommend the government prioritize hospitality occupations within the Provincial Nominee Program and establish a trusted employer program. Low-wage and low-skill positions like light duty cleaners, launderers, kitchen helpers, and front desk clerks should be included as priority occupations. Additionally, the Ministry of Labour should expedite the approval of certificates for LMIA applications to address the current backlog and reduce processing.
The hospitality sector relies on a dedicated workforce of over 28,000 individuals, including vulnerable populations like women, youth, Indigenous peoples, immigrants, and refugees. As trusted employers, hotels offer competitive wages, benefits, and growth opportunities, attracting individuals who choose hospitality as their long-term career. However, the sector is currently facing significant challenges in finding the staff needed to meet demand.
The COVID-19 pandemic has had a severe impact on the hotel industry, with employment dropping by 18% between 2019 and 2021. Despite the recovery of travel, many hotels are still struggling to overcome workforce shortages, limiting room availability and impacting regional economies. The lack of available affordable housing further exacerbates the issue, prompting some hotels to accommodate employees rather than guests.
To address these challenges, the BCHA has taken proactive measures to attract new talent and overcome obstacles. Partnerships with countries like Barbados, El Salvador, and Mexico enable foreign workers to join the industry, while collaborations with organizations like Talent Beyond Boundaries and HIRES connect skilled refugees with local accommodations. Additionally, educational institutions and universities are offering training opportunities to equip unskilled and under-skilled Canadians with the necessary skills for successful careers in hospitality.
To further support the workforce needs of the hotel sector, we need the government’s support in removing the “red tape” ensuring that hotels have access to the necessary workforce to meet demands and drive economic growth.
These workforce support measures are essential to the continued success and sustainability of the hotel industry in British Columbia. Through this, we can overcome the current shortages, provide employment opportunities for vulnerable populations, and contribute to the overall economic well-being of our province.
Our third recommendation is to prioritize investments in tourism through the MRDT system. This system collects funds from the accommodation sector and ensures strategic investment by way of a tri party agreement with the eligible entity, the accommodation sector and the tourism industry.
Our existing MRDT system has an outstanding reputation world wide as it ensures that accommodators, municipalities, and the industry collectively endorse a 5 year strategy aligned with the community priorities. The system benefits from the shared perspectives and alignment with the provincial tourism plan.
The system requires accommodators to consent to an additional tax on hotel rooms, develop a comprehensive five-year business plan subject to approval by the eligible entity, and obtain Indigenous support. In order to ensure fairness, it need to be governed by industry representatives and municipal appointees, to oversee the system’s implementation.
It is worth highlighting the pivotal role this world-leading system has played in the recovery from the COVID-19 pandemic. Its effectiveness is undeniable, leaving little justification for significant alterations. The system’s success stands as a testament to its ability to drive the rejuvenation of the tourism sector in all areas of the provincial, rural and urban alike.
The system’s well-established processes and collaborative decision-making framework have been instrumental in its achievements and should be safeguarded to uphold the ongoing recovery and expansion of the tourism industry within our province.