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COAST SALISH TERRITORY (Vancouver, BC)September 15, 2021 – The Conference Board of Canada (CBOC) and the Indigenous Tourism Association of Canada (ITAC) recently conducted research on the state of Indigenous tourism in Canada. The results showed that while 2021 saw modest gains as a sign of early recovery, the industry still projects a 54 per cent decline in direct GDP compared to pre-pandemic levels. Another study done using Destination Canada’s recovery model, projects that it will take until 2028 for Indigenous tourism to return to peak 2019 levels of employment and GDP.

Changes since 2019:

  • Prior to the 2019 pandemic, Indigenous tourism employed 38.9K employees, and brought in an estimated $1.86 billion in direct GDP
  • During the peak of the pandemic in 2020, Indigenous tourism dropped to 10.6K employees and contributed only $580 million in direct GDP
  • In 2021, Indigenous tourism employed 19.7K and provided an estimated $858 million in direct GDP

The report applies new information gathered from Indigenous tourism operators and ITAC’s members in spring/summer 2021 and reflects the deep and serious impact the pandemic has had on most businesses in the sector. Based on the CBOC research it is estimated that at least a third of Indigenous tourism businesses could still be at serious risk of closure in 2021-2022.

“Based on engaging with operators and last year's research, when COVID-19 first hit, we knew that the negative impacts of the pandemic were devastating to our Indigenous businesses, as it has been for all tourism operators across the country,” said Keith Henry, President and CEO of ITAC. “We have continued to work and advocate with the federal government, as well as provincial governments through our provincial/territorial Indigenous partners, on Indigenous-led solutions. Research like this is important to gauge the health of our industry with concrete data, even if it shows our greatest fears playing out, including over one billion dollars worth of sales lost. This is devastating for Indigenous entrepreneurs, nations and communities from coast to coast to coast who rely heavily on tourism for cultural revitalization and economic diversification.”

More than 650 Indigenous tourism operators participated in the 2020 and 2021 surveys. The biggest concerns amongst operators were the disruption of business into 2022 and beyond, with more than 60 per cent of operators saying they felt COVID-19 would affect their business into 2022 or longer.

ITAC’s own research using the Destination Canada recovery model paints a more sombre picture. According to a recent pulse check and in the very best travel conditions, Indigenous tourism would only be able to return to 2019 numbers by 2028. An even bigger decline is expected if more waves of COVID-19 force further provincial and territorial lockdowns and issues around human resources and lack of support continue to strike across the country.

“Our future may look uncertain but it’s clear that the sector’s path to recovery and renewal will require a series of tailored policy responses to best address the vastly different realities of our industries' diverse businesses. This is why we’ve been advocating for Indigenous-led solutions for the past 18 months. We now need our partners and government to step up if we want to see Indigenous tourism continue. Let’s all hope that tourism recovery and more specifically Indigenous tourism becomes a key topic through all parties during this federal election.”

 
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When budgeting for 2022, what drivers should hoteliers consider changing to ensure a more accurate plan?

By Jill Wilder

As we are all aware, budgeting for 2022 will present some challenges, without a crystal ball we are going to need to use our knowledge to form new ways to plan for our future. While historical drivers helped hoteliers in previous years with their future planning, it’s a whole new ballgame today, as the very way a hotel operates is radically different from even a year ago. As in the past, just comparing departmental profits from previous months is just one piece of the puzzle. To have better, more accurate budgeting numbers for the year ahead, hoteliers need to re-evaluate their drivers and establish a new baseline data set.

Here’s why: Pre-COVID, the most common drivers when working in budgets and forecasts were “per occupied room” and “percentage of revenue” with very standardized values. By simply adjusting the room occupancy values, expenses and revenues would automatically re-calculate and change accordingly. Today, hotels are different with one key difference due to staffing and capacity limitations. In many situations, cleanliness is key and the length of time for a housekeeper to accomplish their tasks is dramatically different.  Therefore, “per occupied room” will not be the only way to calculate their hours.  Should you be considering a “per check-in or check-out” as a driver?  How does the stayover with cleaning vs. stayover without cleaning impact Housekeeper hours?  In the Food & Beverage revenue area, how have the number of covers/occupied room values changed and should there be an outlet capacity that now needs to be included in calculating the revenue per meal period?

What is to be considered for other operating expenses?  An example may be guest supplies have been $1 per occupied room in 2019.  Is it now best to consider merely increasing that value to cover the increased supplier cost or should we be looking at the number of budgeted daily check ins in addition to the increased cost?  In this situation using more than one driver for a calculation may provide a more accurate value.

Rather than copying and pasting prior year driver values into the 2022 budget and forecast hoping you hit the target, reconsider what the new driver and/or values are that drive your hotel.  Use your experience to create new drivers and only rely on the history as a guide. The effort in doing this will provide you with a better starting point for the upcoming years.

The best way to budget and forecast accurately and avoid trying to explain what is happening financially to an owner is to enlist the help of a financial management software company offering web-enabled business intelligence, budgeting, and back-office systems that are 100% hospitality specific. Not only will this technology partner help each property re-evaluate its existing drivers, but it will identify new drivers to correspond with relevant data sets.

Deploying the right enterprise accounting, business intelligence, and budgeting and forecasting solutions will help operators better prepare for change. Since most management contracts and bonuses are based on the accuracy of what is being forecasted, there is no time like the present to make a change, especially for those properties still writing and relying on individual Excel spreadsheets to hit their targets.

At the end of the day, we are all shooting for accuracy. By automating the budgeting and forecasting process, hoteliers will have one source of the truth. A system like Targetvue from Aptech, for example, is equipped operators with Forecast Worksheets that eliminates the need for someone at corporate to create and individual Excel spreadsheet for each hotel and later collect them from the properties and hope the data is accurate. Data can be input via a web browser and cannot impact the logic of the models. Rather than requiring one document per hotel, Targetvue works with drivers to pull in relevant historical data and compare it to years that make sense, such as 2021 vs. 2019, for improved consolidating and reporting.

It’s widely apparent that it is still not business as usual. As a result, hoteliers need to make some drastic changes if they hope to reopen successfully. Re-evaluating a hotel’s drivers is a critical first step towards financial stability. The most accurate way to compare Plan with Performance is to automate the hotel’s budgeting and forecasting processes with a flexible solution proven to drive accuracy and set realistic goals for the hotel enterprise.

 
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As Canadians emerge from their homes this summer after the long COVID winter, they are looking for entertainment – any entertainment. They want to sleep in a bed that isn’t theirs, in a room they didn’t clean. They want to eat a meal they didn’t cook at a table they didn’t set.

And the hospitality industry stands to benefit greatly from all this pent-up energy. It doesn’t mean a complete rebound or a near-normal situation. But the industry is bouncing back to a state that is vastly improved from last year.

With coronavirus restrictions still in effect until mid-June, the Canadian hospitality industry hasn’t really started on its path to recovery. In May, hotel occupancy hit 28.1%, significantly better than 2020 levels, but well below the pre-pandemic levels of 2019.

Market predictions suggest the industry won’t bounce back this year, as travel restrictions keep Canadians at home. The best estimates indicate that Canadian hotel occupancy will increase to roughly 38% this summer. And although Restaurants Canada predicts an upward trend as well, the expect business to remain 20% below pre-pandemic levels.

On the other side of the border, where the recovery is further along, signs are more hopeful. In May, U.S. hotels hit average daily occupancy rates of 59.3%, their highest since before the pandemic. And U.S. restaurant sales were only slightly below pre-pandemic levels.

Managing the hard insurance market

Despite the upward trend, securing appropriate insurance has been a major roadblock for many hospitality businesses across North America. The insurance market is the hardest it’s been in decades, decreasing insurance availability and increasing costs significantly.

While some insurance carriers are simply exiting the market, others are substantially hiking premiums or specifying additional exclusions, including COVID-19 and other communicable diseases. Umbrella (excess liability) coverage is difficult to find. And broker strategies like layering (covering exposures in multiple layers among multiple insurers) are more challenging to create.

On the property side, rates have been a continuing issue – especially with increasing larger claims for natural disaster damages – but they were also aggravated by COVID-19-driven business interruption exposures. Executive liability exposures created by the pandemic are driving directors & officers and errors & omissions coverage up by 50%, too. And cyber insurance is also under pressure, as the growth of technology solutions related to the hospitality industry has led to an increase in cybercrimes, along with premium increases of up to 50%.

The key to the challenge is to work with a broker or risk consultant, an expert on the changes impacting the industry and the logical choice to guide hospitality businesses forward. These professionals are also well positioned to help owners and operators present their cases on successful risk management to underwriters.

Making investments in the future

Although tourism is still slow this summer in Canada, there is a huge pent-up demand for travel and dining across North America. Families are desperate to leave home and see something new. Young adults and Boomers are looking for face-to-face interactions. And business people are looking toward in person meetings and conferences – one of the lodging industry’s profit centres – which may not happen until 2025.

The good news is, many owners and operators took advantage of the pandemic shutdown to make investments in technology and personalized service features, which should position them well during the return to normal. Customer expectations regarding “touchless transactions” and “smart” technology are growing. The “smart” global hospitality market is expected to more than double to $12.727 billion by 2025.

The success of the post-pandemic future is riding on a host of new and added capabilities in terms of guest and staff safety and safety compliance. Even more than the obvious booking and check-in platforms, integrated platforms can track where and when guests use spaces and when they’ve been sanitized, as well as communicate with guests when rooms are ready. Behind-the-scenes operations are facilitated, too, like coordinating with housekeeping and other departments.

Since the guest experience is a driver of success, much of the investment is customer facing now. It’s also driving personalization, another trend that relies on digital solutions. In fact, the top two technology priorities by hospitality organizations are digital analytics (to gain better insights) and the front-end customer experience.

Personalizing the guest experience is easy with analytics data leading the way, especially when that data is informed through persona development. Personas provide a deep dive into customer segments so operators can align services and experiences to those preferences. Given the vast amount of data at a hotel’s disposal, this can be an ambitious undertaking. 

The value of personalization, however, is clear through the return on investment. For example, consider business reviews. One study showed that every one-star increase will boost a hotel’s revenues by 5% to 9%.

Another survey found 82% of respondents will pay a premium for a 4-star rated lodging.

The Canadian hospitality industry has a long road ahead of it, especially with the border with the U.S. still closed. But it’s in a much stronger position than it was this time last year, or even a few months ago. Resilient hotels and restaurants will be able to manage the risks and still come out ahead.

 
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Vancouver, BC — Over 1000 hospitality workers in hotels, motels, pubs, and liquor stores across 14 communities in BC overwhelmingly voted by 80% to ratify a new four-year agreement with Hospitality Industrial Relations (HIR). This contract includes an extension of recall rights for the duration of the COVID-19 pandemic — through to July 1, 2023 or when the World Health Organization (WHO) declares the pandemic is over. After an 18-month effort, BC’s hospitality workers, represented by UNITE HERE Local 40, have achieved a new standard securing the right of workers to return to their jobs as business recovers.

Workers fought to push back against an industry attack to replace their good living wage jobs with those at minimum wage and eliminate union health and pension benefits. HIR employers finally agreed to extend recall rights for all properties. Local 40 members only agreed to settle if their pension, health care, severance pay, and workload were protected. As well as winning unlimited recall rights to cover future crises such as pandemics and natural disasters, they won longer recall protection for regular seasonal layoffs, increasing from 6 months to 12. 

Workers at several HIR properties, such as Harrison Hot Springs Resort and Holiday Inn Vancouver, organized and participated in rallies earlier this year to protest the industry’s attempt to impose deep concessions which would have rolled back years of hard-won gains. UNITE HERE Local 40 called on HIR to find a path forward to address the impact of the pandemic on hospitality workers and their employers. HIR issued a lockout notice in mid-April, which would have disproportionately impacted women and racialized workers.

Jan Budd, a kitchen helper for 30 years at Holiday Inn & Suites Vancouver Downtown, said: “It feels incredible to have been part of this huge victory, after so many months of fighting against the industry. I can breathe a sigh of relief now knowing that I won’t have to start all over again at minimum wage. HIR finally respected our years of service, and I’m looking forward to seeing everyone back at work again as business eventually recovers.”

Fe Taala Casas, a room attendant for 26 years at Inn at the Quay in New Westminster, said: “I’m over the moon. We fought very hard since the pandemic started to make sure all of us would have jobs to go back to once Covid is over, and in the end, we won just that. I’m very proud that we were able to make sure recall rights would be extended, and that we protected our pension and health care. This victory sends a strong signal that other hospitality employers should be making sure no one loses their job because of this pandemic.”

The new contract covers hospitality workers in Vancouver, Victoria, Coquitlam, Richmond, New Westminster, North Vancouver, Abbotsford, Harrison Hot Springs, Kamloops, Castlegar, Port Alberni, Mackenzie, Prince Rupert, and Fort St. John.

While HIR has extended recall rights, some BC hotels such as the Pacific Gateway, Hilton Metrotown, and Coast Bastion still refuse to commit to returning workers back to their jobs. The union launched the Unequal Women campaign in March to call attention to hotels that refuse to guarantee workers — many of them women and immigrants — the right to return to their jobs as the industry recovers.

 
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The Western Canadian Lodging Conference will be held November 22nd & 23rd at the Hyatt Regency in Calgary.  Mark your calendars for this LIVE event!  We will also provide a Live Streaming option for all sessions.  

Stay tuned for more information regarding registration, speakers & panelists.

 

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