City Of Vancouver Looks To Address Hotel Room Shortage

As promised, Vancouver City Councillor Sarah Kirby-Yung will introduce a motion next week that would see the City address the hotel room shortage in Vancouver ahead of numerous large-scale events that will be taking place in the coming years.

Kirby-Yung, who previously worked in the tourism and hospitality sector, said in mid-August that she would be introducing a hotel-related motion when Council meetings resumed in September, and the motion, entitled "Addressing the Hotel Supply Gap to Support Tourism Economy and Reduce Pressure on Local Housing," is now on the docket for the Standing Committee on City Finance and Services meeting on Wednesday, September 13.

"The lack of hotel capacity in Vancouver could cost the city billions in lost economic impact and thousands of unrealized full-time jobs," Kirby-Yung says in her motion. "In March 2023, Destination Vancouver identified that in order to close the gap between current supply and projected demand, 20,000 new hotel rooms are needed in Metro Vancouver by 2050; with 10,000 of those new hotel rooms necessary in Vancouver."

In the coming years, Vancouver will be hosting the Canadian Football League's 2024 Grey Cup, the 2025 Invictus Games, and — along with other North American cities — the 2026 FIFA World Cup. Later this month, Vancouver is also hosting the Laver Cup, the men's tennis tournament created by Roger Federer.

If that shortage of hotel rooms is not addressed, Kirby-Yung says, Metro Vancouver as a region could lose out on $16.6B in GDP and $7.5B in foregone tax revenue for all three levels of government.

"Vancouver’s continued loss of hotel rooms was identified by the tourism sector prior to the pandemic and is due to development policies that provided geographic and zoning restrictions," she added. "The high cost of land is also resulting in alternate use of sites including conversion to residential housing, and the high costs of operating properties are also a barrier. Lengthy approval processes, view cone restrictions, and stringent shadow protections have created additional challenges."

Like many others, the hotel sector was greatly affected by the COVID-19 pandemic and restrictions on international travel. During the pandemic, the provincial government acquired multiple hotels to convert into temporary supportive housing. Both have resulted in a loss of hotel rooms, and very few new hotel projects have been proposed since then.

In March, Marcon filed a rezoning application with the City to develop a 32-storey hotel at 509 Richards Street. Last August, a rezoning application was also submitted to develop a 30-storey hotel at 848 Seymour Street. Bosa Properties also submitted an application last September to develop a mixed-use complex that includes a 10-storey hotel on West Broadway.

Kirby-Yung notes that the City introduced an Interim Hotel Development Policy in 2018, but says that it was not created to provide incentives to develop hotels and also did not address rezoning.

As such, Kirby-Yung's motion would direct staff to come up with ways to build upon that existing policy, whether it be expanding the geographic site the policy covers, amending rezoning policies for the Central Business District, or creating methods to enable more mixed-use or innovative forms of hotels.

Similar to residential housing, her motion would also see the City set supply targets for new hotel rooms and track the progress toward meeting those targets. Furthermore, the motion directs staff to report back on all active development applications that involve hotel uses and have yet to commence construction in order to identify methods to expedite their delivery.

Work on the above would also potentially see the City consult with industry groups such as Destination Vancouver, the Vancouver Convention and Exhibition Centre, the Vancouver Hotel Association, the Vancouver Hotel Destination Association, the British Columbia Hotel Association, as well as the development industry.

Kirby-Yung is asking staff to report back with an updated hotel development policy by the end of Q1 2024.