PHOENIX, Ariz. — Hotel Association of Canada president and CEO Susie Grynol talked about the unique challenges faced by the Canadian hotel industry in an interview with No Vacancy News founder and show host Glenn Haussman at the Best Western 2020 Virtual Convention on Oct. 28.
“It’s been an insane roller coaster ride,” Grynol told the convention. “Occupancy went down to 10 per cent in April; it was 10 to 13 per cent in the early months and then went up to 42 per cent in August. Now, we’re back down at 32 per cent, and we expect it to stay at 20 to 30 per cent between now and the end of June.”
Why Canadian occupancy levels are so low
Canada’s occupancy levels are among the lowest in the world. “Our government has a more conservative approach to the pandemic. Borders have been shut down and we have barriers within our own country. People can’t travel to the Maritimes and there’s a 14-day quarantine in Manitoba. Canada has a culture of rule following. If the government says you can have six people in your house, then people do that.”
Regarding travel decisions last summer: “We didn’t see Canadians move around as much as we thought we would. They stayed off the grid; they went to cottages; and resorts operated at half capacity, while our urban hotels sat empty.
“Without revenue coming in the door, I don’t think we will recover in a meaningful way until June.”
Wages are the highest fixed cost that hoteliers face. Canada has a wage subsidy program that is one of the most generous in the world — and the government has extended it until June, 2021, Grynol said.
But one of the problems faced by hoteliers is that the banks feel the sector is too risky; that hotel owners won’t be able to make their payments; and that loans don’t make sense. “They offered a six-month mortgage deferral, but we’ve reached that six months and it’s time to pay the piper.”
HAC is working with the government on a special loan program just for hotels, and they are hoping to see an announcement in the next couple of weeks. They are also working on another program that would provide money in the form of grants.
The pandemic has taken its toll. “We have seen some permanent closures here in Canada, and it’s heartbreaking to see,” said Grynol. “As an advocacy association, our goal is to prevent as many of those shutdowns as possible. We really need the predictability of knowing whether the stimulus will last until June. We got all that we wanted in the Speech from the Throne, but 60 per cent of our businesses say they are on life support and won’t make it through the next six months without help; 40 per cent are behind on their mortgages, which is just unheard of; and 25 per cent are behind on their property tax.”
The employee issue was the first thing Grynol heard about when the pandemic began. Employers had deep concerns for their employees. At one point, 80 per cent of employees were laid off. Many have been brought back, but we have lost about 40 per cent, she noted.
“The ones that are going to stay are getting a wage subsidy that has been extended to June. What keeps me up at night is how do we get all those employees back?”
Boosting the desire to travel
Grynol feels strongly that there can’t be a binary choice between the economy and health. “People have to get on with their lives, but do it in a responsible way. Business has to be responsible and individuals have to be responsible. When you look at the death toll, these are vulnerable people that are dying; they are not healthy people and they are not the young. I hope for the sake of our economy that we do start to see a better-balanced conversation and our government has work to do in that regard.”
Canada will always be a special place in the world for travellers. “Hang in there. We can get to the other side and we will see a strong recovery,” she said.