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Calgary Tourism

Economic recession hits Calgary hotels hard

Mario Toneguzzi  Mar 23, 2010

CALGARY - Last year hit the Calgary tourism industry hard.

Despite numerous events in the city -- including the Brier, the WorldSkills competition and the Grey Cup-- the economic recession took a bite out of hotel room occupancy rates, which fell 5.5 per cent from 2008.

But Calgary Tourism expects a slow rebound this year, and the new kid on the hotel block, Le Germain, is poised to take advantage of expansion in the city's tourism industry.

The unique boutique hotel, which opened in February, has 143 rooms in a luxury environment and is the first major hotel to open in the downtown core since the Hyatt 10 years ago.

"The vitality we're adding to the downtown will be tremendous," said Chris Vachon, general manager of Le Germain, which also has boutique hotels in Quebec City, Toronto and Montreal, and another under construction in Toronto.

"We're expecting to enter the market in a higher-end fashion with, we believe, one of the best products that the city of Calgary has seen in a number of years."

"Our footprint is very European in the sense of the surroundings, the colours, the framework, the showers, a lot of natural light aspects, a lot of earthtones in a quite high-end product. Some of the latest technologies. The key card system that eventually will allow our guests to check in by their cellphone," said Vachon.

The 12-storey hotel, which is attached to a residential condo and office complex across from the Calgary Tower, is banking on its amenities to attract guests in a tight, competitive industry, particularly this year.

Those amenities include such things as the new CHARCUT Roast House restaurant, 6,000 square feet of meeting space with a rooftop terrace, room sizes from 410 square feet to 1,100 square feet, six levels of underground parking and a 5,000-square-foot spa to open as well.

"What we sell is an experience," said Vachon.

Joseph Clohessy, president of the Calgary Hotel Association, said the hotel industry supply was flat in 2009, but about 600 new rooms are expected to hit the market in the next year or so.

Currently, there are about 10,500 rooms across the city.

In the first two months of this year, occupancy has been down three per cent from a year ago, he said, but last year in January a big sales convention boosted those numbers.

Although tourism is a year-round business, the months from April to September are the busiest for Calgary and Randy Williams, the new president and CEO of Tourism Calgary, said this year will be better than last year.

"We won't see further erosion," said Williams. "Through 2008 and 2009 we saw negative growth. We started to see that erode in 2008.

"What we're seeing now is that there's some interest in the future, whether it be for 2011 and 2012 for groups and conventions, and a pickup in the activity.

"It will take time for the tourism sector to fully rebound. We seem to be an industry that's widely recognized and one of the first to be the canary in the mineshaft as far as feeling the effects of a recession, and then one of the last industries to come out of a recession because it's all about consumer confidence and a strong economy."

He said 2010 will be a year where the city sees an "inching up" of revenues over last year in the tourism sector. Because 2009 was about six per cent less than 2008, growth of one or two per cent this year still leaves us behind levels two years ago.

"But at least it's heading in the right direction again," said Williams.

And officials are hoping a couple of new initiatives will help boost those numbers.

Earlier this month, Tourism Calgary, the Telus Convention Centre and the Calgary Hotel Association announced they had formed a unique partnership to work together to attract new meetings and conventions to the city.

Also, the hotel association and Tourism Calgary have a memorandum of understanding to develop a new destination website to be launched in May.

The website will have information about hotels, attractions, restaurants, meeting facilities all in one place to make it easier for potential travellers to build packages, said Clohessy.

But the continued malaise in the U.S. economy and the Canadian dollar flirting with parity with the greenback could be the wild card.

"It's really going to be interesting to see where the American traveller plays into things this year," said Clohessy. "Obviously the economy in the U.S. is in a lot more flux than we see in Canada . . . It will be interesting to see if the U.S. traveller starts to get back on their feet.

"You look at the job numbers and all of the indicators -- it's still going to be a very tough year. If anyone is pitting their year on the U.S. traveller, it would be a mistake."

Economic recession hits Calgary hotels hard
Calgary / Image via


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