Key strategies for managing costs and meeting guest expectations
Do your hospitality workplace supervisors understand their role?
First Nations unite to acquire majority stake in Hilton Québec in historic partnership
Architecture & Design: Le Spa at Manoir Hovey is a testament to heritage and innovation
Do
circular
Banking on 2025: What Canada's financial leaders are predicting for the economy, pg.
From deals to development, Mark Kay gets granular on hotel financing, pg. 23
How Canada’s hotel sector attracts capital amid market shifts, pg. 29
Why stagflation is still possible and why this matters to hoteliers, pg. 31
for managing costs and meeting guest expectations in 2025
Avendra’s Afsar Ali Khan: Building relationships and lasting success for hospitality partners
Canada needs to invest in older rental housing, not just build new real estate properties
Hilton Québec enters new chapter under First Nations leadership
Greater Toronto Hotels as the foundation of a global city
WINTER 2025
Volume 5 Issue 1 staymagazine.ca
PUBLISHER
Big Picture Conferences
EDITOR-IN-CHIEF
Stacey Newman
stacey@staymagazine.ca
DIRECTOR OF SPONSORSHIP & ADVERTISING
Mike Egan
mike@staymagazine.ca
ART DIRECTION + DESIGN
Sonya Clarry + Brienne Lim
CONTRIBUTORS
Jim Byers, Sara Anghel, Mark Kay, Ed Khediguian, Deborah de Lange, Troy Taylor, Stacey Newman, Grant Alexander Wilson
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STAY is published four times per year by Big Picture Conferences. For 27 years, Big Picture has been hosting the Canadian Hotel Investment Conference (CHIC) and other go-to conferences and events for Canada’s hotel industry. For subscription inquiries, please visit staymagazine.ca/ subscribe.
ISSN: 2816-7864
Key title: Stay
EDITORIAL ADVISORY BOARD
Robin McLuskie Managing Director, Hotels, Colliers Hotels
Brian Leon President, Choice Hotels Canada
Brian Flood EVP and Practice Leader, Hospitality and Gaming, Cushman & Wakefield
Scott Richer VP, Real Estate and Development (Canada), Hyatt Hotels
Ed Khediguian Senior VP, CWB Franchise Finance
Bill Stone President, Knightstone Hotel Group
Gunjan Kahlon Consultant
Judy Sparkes-Giannou Co-Owner, Clayton Hospitality Inc.
Deborah Borotsik Senior VP, Beechwood Real Estate Advisors
Alan Perlis President & CEO, Knightstone Capital Management and CEO, Knightstone Hotel Group
Alnoor Gulamani President, Bayview Hospitality Inc.
Christina Poon General Manager, Hotel W New York – Union Square
Phil Thompson Business Lawyer, Thompson Transaction Law
Sandra Kanegawa Owner, Heritage Inn Portfolio, X-Dream
The Winter 2025 issue of STAY Magazine focuses on the key developments affecting the hospitality industry in the first quarter of the year. This issue examines the dynamics facing Canadian hoteliers amid a shifting economic and political landscape.
The state of the Canadian economy is a central theme. Our experts discuss interest rates, political transitions, and trade tensions that are influencing industry operations. Expert analyses highlight the importance of resilience and strategic planning to navigate new waves of uncertainty.
This issue also explores the role of the circular economy in advancing sustainable practices and diversifying trade. With operational costs rising and resources becoming scarcer, adopting circular practices is emerging as a viable solution for industry.
We address the housing affordability crisis and its impact on the sector. Preserving aging rental housing is critical for maintaining workforce stability in urban centres, a challenge with direct implications for hotels.
This year marks the centennial of the Greater Toronto Hotel Association (GTHA). The milestone provides an opportunity to reflect on the association’s role in shaping Toronto’s hospitality sector and its plans for the future.
We feature an expansion and renovation case study about Le Spa at Manoir Hovey in Quebec which integrates historical architecture with modern amenities; a report on the increasing demand for ultra-luxury travel, highlighting its growth globally and its impact on Canadian properties; and our feature story about Hilton Québec as the hotel enters a new chapter under First Nations leadership.
This issue brings you expertise on workplace safety in hotel operations, with a focus on supervisors’ roles in ensuring compliance with health and safety standards.
As the new year is underway, despite some of the concerns we are facing as a society, I feel optimistic as well. We are primed to embrace change, build up new leaders, and forge a path forward that strengthens us as a country and an industry by uniting in response to new challenges.
I hope our first issue of 2025 provides practical insights and genuinely informative stories to help our valued readers achieve success in your projects and plan for the future!
Thank you for reading,
Stacey Newman Editor-in-chief
“Supervisors have some of the greatest responsibilities in the workplace. They take on the role of coach, referee, and player,” says Ayden Robertson, senior health and safety consultant with Workplace Safety & Prevention Services (WSPS). “It’s so important that supervisors receive training that clearly explains their role and legal responsibilities.”
When supervisors do not fully understand their responsibilities, it could result in an unsafe workplace and individual fines. For example, if a supervisor fails to ensure workers are provided with appropriate personal protective equipment (PPE) for the chemicals they are handling, they could be fined. In fact, the supervisor could be criminally liable if a workplace fatality occurs, pending an investigation.
Ultimately, the employer is responsible for the safety of all employees; however, supervisors are often the ones working directly with workers, ensuring safe working procedures are being followed and PPE is being worn properly.
“It could be the general manager, assistant general manager, housekeeping lead, or kitchen supervisor. We’re talking about anyone who is organizing and assigning work, training workers on safe ways to work, or ensuring that things are being done a certain way,” says Robertson.
“Often the people acting in a supervisory capacity are also doing the work themselves,” he says, highlighting that this can be viewed as an advantage because they usually know what’s happening on a day-to-day basis. They interact with both workers and leadership, keeping everyone in the loop.
Robertson explains that hotel staff are at higher risk for workplace violence and harassment because of their direct involvement with the public, late hours, and employees working alone.
“Most hotels should have a robust violence and harassment policy and program in place. But it’s effective only if workers are properly trained and follow procedure, and that starts with the information and instruction they receive from their supervisor,” he explains.
If an incident occurs, an investigation will likely follow. Inspectors will ask the supervisor questions to determine what led to the incident and to ensure that the supervisor and the employer exercised ‘due diligence’. Due diligence essentially means that the employer and supervisor took
Supervisors play a critical role in managing health and safety in any workplace. To do their job effectively, they need adequate time, proper resources, and the required tools. Here are some things employers can do to set up their supervisors for success and demonstrate due diligence.
Give your supervisors the knowledge they need to meet the legislative requirement of competency. In addition to having experience in how to assign the work, supervisors need training on health and safety legislation and how it applies to their workplace. Ensure supervisors know how to implement the RACE method of hazard recognition—Recognize, Assess, Control, and Evaluate—so that they can effectively manage the actual and potential hazards present in the workplace.
When completing hazard assessments and developing safe work procedures, get the supervisor involved rather than handing it down to them afterwards. This involvement will ensure that the supervisor has a solid understanding of the hazards, controls, and processes. It will also help supervisors explain and enforce the process with workers.
reasonable precautions to prevent the incident. “If the supervisor isn’t able to adequately demonstrate that training was provided and efforts were made to ensure safe working procedures were followed, their competency may be called into question,” notes Robertson.
“A competent supervisor is someone who is qualified because of knowledge, training, and experience to organize the work; is familiar with the applicable legislation; and has knowledge of any actual or potential danger to health and safety in the workplace,” explains Robertson. “In order to protect workers, supervisors must be able to recognize hazards and determine what is needed to allow the work to be performed safely.”
For example, if a cleaner has a tear in their glove that could lead to their skin being exposed to a harmful chemical, the housekeeping lead needs to be able to recognize the hazard and ensure the worker gets a new glove. Similarly, if the kitchen lead sees a worker operating a slicer without proper guards, they need to be able to recognize that and ensure the guards are put in place. “Supervisors need to understand the risks and the appropriate controls required to mitigate those risks,” says Robertson.
When supervisors have good relationships with workers, it’s much easier for everyone to work together. Employers can support this by creating a positive and respectful working environment and working with supervisors to foster relationships. Supervisors should also have productive and open communication with the joint health and safety committee so they can work together to identify and control workplace hazards.
It’s important for supervisors to be comfortable with the organization’s health and safety management and incident reporting systems. They need to understand the requirement for proper documentation for things like training, hazard assessments, and procedures so that they have this information available if it is requested during an investigation.
Ask the experts. To find out more about supervisors’ responsibilities and other workplace health and safety resources, check out WSPS.CA.
BY JIM BYERS
The world left the worst of the pandemic behind two years ago, and the era of high-charged “revenge travel” appears to have ended. But the demand for luxury hotels remains incredibly strong.
A recent study by CoStar found that the number of worldwide hotels charging at least $1,000 (all figures USD) per night has nearly tripled since 2019. There were 179 hotels around the globe with an average daily rate of $1,000 in 2019. But CoStar reports that number has skyrocketed to 499, more than 2.5 times what it was just five years ago.
And you thought the price of eggs was bad.
“I think it’s just a new kind of ultra-luxury product emerging for those ultrahigh-net-worth travellers willing to pay” for luxury vacations, says Laura Baxter, who is the director of hospitality analytics, Canada for CoStar Group.
“It is surprising because it’s such a drastic change. But luxury hotels have grown quite a lot in the post-pandemic rebound.”
“Strong leisure demand from high-end travellers has supported robust pricing increases at high-end hotels,” CoStar reports in what might be the understatement of the year in the hotel world. “This speaks to the proliferation of higher-end brands and the global nature of high-end leisure demand.”
The findings show there were 33 hotels in the U.S. with an ADR of $1,000 in 2019. For 2024 there were 95. That’s just shy of a 200 per cent increase in five years.
Since 2019, the number of hotels reaching an ADR of $1,000 in Italy has gone from 21 to 69, while in Spain it rose from zero to 14. Mexico went from six hotels with an ADR of $1,000 in 2019 to 19 in 2024.
Baxter told STAY Magazine that the high-end hotel trend isn’t necessarily going to be that strong in Canada.
“Luxury in the U.S. and Canada can be priced quite differently,” she says.
CoStar’s findings show that Canada had no hotels with an ADR of $1,000 in 2019 and just one hotel in 2024, which was not named.
According to news sources such as The Globe and Mail, Niagara Falls Review and the Open Jaw Network, there are resorts, independent, and smaller hotels in Canada that have charged $1,000 or more a night for highly specialized experiences, or during major event tours like Taylor Swift’s “Eras” tour and the solar eclipse. But these are exceptions.
The ADR in Canada last year for what CoStar brands as a luxury hotel was USD 290.43. That’s up from $228.78 in 2019, she states.
For a luxury hotel in the U.S. last year, the ADR was USD 387.59, up from $297.08 in 2019. This means Canadian luxury hotels in 2024 had a lower ADR than U.S. luxury hotels did in 2019.
“It is a lot,” Baxter says, addressing the cost difference between Canada and the States. “In addition, luxury hotels in Canada haven’t grown as fast as those in the U.S. Since 2019, there’s been about a 30 per cent growth for luxury hotels in the U.S. In Canada, the uplift is about 25 per cent.
“One reason is Canadian hotels have to deal with seasonality,” she explained. “In the U.S. there’s not as much difference between low and high season.”
Baxter says Canada isn’t building as many new luxury hotels as the U.S., even on a per-capita basis.
The U.S. has some 8,600 luxury rooms under construction right now, she says, while Canada only has a single hotel, the Nobu Toronto. There are others in the final planning stages, including the Clayfield Unbound Collection property by Hyatt in Niagara-on-the-Lake and a new Hyatt in Orillia, Ontario called Cape Resort. But they’re not yet under construction.
Pearle Hospitality is turning the Toronto Power Generating Station in Niagara Falls into what it says will be a five-star waterfront hotel, but Niagara Parks says it likely won’t open until 2027.
The CoStar report indicates that high ADRs are likely to continue around the world due to a couple of trends.
“For one, hotels will continue to monetize the demand for their high-end offerings. In addition, hotel developers will continue building properties to target the high-end income level, and the number of properties reporting an ADR of over $1,000 will likely steadily increase.”
"We're seeing a bifurcation by hotel class," Jan Freitag, national director, hospitality analytics, at CoStar Group in the U.S. said earlier this year. "The higher-end traveller and, therefore, the higher-end hotels are showing robust growth in demand and room rate. But the same cannot be said for the lower end of the market."
The hotel industry has indeed seen notable shifts in room rates, largely due to escalating operational costs across our sector according to Adrienne Foster, vice president, policy and public affairs for the Hotel Association of Canada. “In Canada, hotels are navigating a high-cost environment with significant increases in wages, insurance, energy, and supply chain expenses,” she says.
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“These rising costs have made price adjustments essential to maintaining service quality and operational sustainability, especially as we continue to address workforce shortages and meet evolving guest expectations. Canadian hotels remain focused on offering value while adapting to these economic pressures, ensuring high standards are upheld across the country.”
Frederic Dimanche is the director of the Ted Rogers School of Hospitality and Tourism Management at Toronto Metropolitan University. He suggests that “revenge travel is a factor that has led to increased demand and, as a result, increased prices, especially in the luxury hotel sector where supply
may be limited. The pandemic and the recent worldwide inflation also resulted in increased costs of operating. For example, labour shortages in hospitality have led to increased wages for skilled employees to attract and keep them.”
Dimanche also says the most important factor in explaining the rising demand for luxury travel is that global statistics indicate the number of wealthy people in the world is growing steadily.
Baxter says the recent slump in the Canadian dollar might boost Canadian luxury hotel business.
“I think it would definitely help. With the strong U.S. dollar, outbound travel by Americans has spiked. They’re travelling more than they did pre-pandemic, and we know Americans like to travel to places where their dollar goes further. Canadian hotels should certainly benefit.”
Note from the editor: All ADR figures in this article are reported in U.S. dollars (USD). Exchange rate fluctuations between 2019 and 2024 may impact how ADR growth appears for hotels outside the U.S. Countries with weaker local currencies against the USD, such as Canada, may show lower growth in USD terms despite increases in local currency. Conversely, countries with stronger or more stable currencies may reflect a higher perceived ADR increase when converted to USD.
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BY DEBORAH DE LANGE, ASSOCIATE PROFESSOR, GLOBAL MANAGEMENT STUDIES, TORONTO METROPOLITAN UNIVERSITY
In response to U.S. President Donald Trump’s threats to impose a 25 per cent tariff on Canadian imports and his escalating hostile rhetoric, Canada and its allies must urgently explore new international trade strategies. Trump’s proposed tariffs could reduce trade and hurt the economy if left unchecked.
The World Trade Organization and its members have an opportunity to counter potential adverse effects of forthcoming U.S. policies by diversifying trade with other countries and increasing international trade through the circular economy.
A circular economy requires that a variety of stakeholders—consumers, businesses, governments, non-governmental organizations, and academia, among others—cooperate to transition away from a linear economy (buy, use, throw away), and, instead, repurpose materials and energy.
Building a circular economy is critical because wasted materials and energy not only damage the environment but are also growing increasingly scarce and expensive. My recent study, entitled Circular economy international trade: An investigation of the relationship between European Union circularity and international trade, examines whether higher rates of industrial circularity can increase a nation’s trade.
To address these economic, security and environmental issues, industries must prioritize the development of circular systems. The future of our economic security and natural environment requires a cross-sector effort to advance circularity.
One of the most conspicuous examples of waste’s impact is the five ocean garbage patches—massive, floating islands of debris. In developed countries, municipal services remove trash from sight, making it easy to forget its environmental consequences. However, many developed countries—including Canada—export their waste to developing countries that have less capacity to deal with the issue.
Sometimes it takes the actions of other countries to put pressure on developed countries to change. When China restricted imports on certain types of waste, developed countries had to figure out how to deal with their own waste, rather than exporting it. This has included improved recycling, but it also created opportunities for business innovation.
Making waste tradeable requires processing and innovation to repurpose materials into usable goods. The circular economy, therefore, presents an opportunity for the trade of new, more environmentally friendly products to consumers.
Increasing global trade by using waste instead of throwing it away also offers openings for emerging and developing economies to participate in more international trade. They can build new businesses that take advantage of circular international business opportunities. Now more than ever, emerging and developing economies need more sources of income and employment.
The circular economy also stimulates business activity by encouraging collaboration between organizations, resulting in the creation of new companies. It will create employment opportunities while saving materials and energy.
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Europe has taken the lead in advancing the circular economy as part of the European Green Deal. Italy stands out as a noteworthy example.
Italian legislation has supported the development of eco-industrial parks, where companies collaborate locally on sustainable business practices, such as selling material outputs to each other to reduce waste.
Italy has also developed research, clean production, distribution, and postconsumption waste projects to embed circularity into its economy. For example, Italy encouraged the use of recycled and compostable materials in packaging and products through corporate tax credits while taxing virgin materials in construction.
Even Italy’s fashion industry is involved, with research initiatives like Circular Threads targeting Northern Italy’s textile sector. Consumer groups have signalled their support through the Circular Consumption Charter, which is backed by 18 Italian consumer associations.
However, European companies still need clearer economic information that connects investing in circular business models with tangible financial benefits. This is where my recent study comes in.
Using several years of data from all 27 European Union countries, my study found a clear connection between circular material use and international exports of the largest types of waste trade — metals, plastics and chemicals.
The EU tracks annual circular material use rates by country. My analyses showed that across material types, higher national circularity drives international trade in waste and scrap. In other words, countries with higher circularity rates engaged in more international trade.
This direct link highlights the potential for firms to invest in the business of the circular economy. Once this fact is understood, then the international market opportunities await.
But what is the best way to support the development of circularity across industries? Research has debated whether policies or research and innovation are most effective tools for change.
My study found that circular economic policies, research and innovation — separately and combined — significantly improve countries’ industrial circular capabilities. Among these measures, stringent environmental policies that impose costs on polluting proved particularly effective, similar to how carbon taxes work.
My study was made possible by the EU’s commitment to providing publicly available data on circularity across member states. This level of cooperation is a model all nations would benefit from. Cross-sector partnerships have also resulted in the creation of successful eco-industrial parks.
Establishing more of these hubs would be a tremendous step forward and enable more circular trade across borders. Canada is already a leader in this space, with examples like Burnside Industrial Park in Halifax.
Established in the 1970s and supported by Dalhousie University’s Eco-efficiency Centre, this park is one of the largest in northeastern North America. It hosts roughly 2,000 enterprises and 30,000 employees. Collaborative partnerships at the park have included waste exchange in wooden pallets, metals and packaging.
Burnside Park is just one of many examples of how Canada can build its economic security through industrial ecology. However, to reduce dependence on the U.S., Canada needs its businesses and eco-industrial parks to diversify into international markets. Europe has become a critical partner with initiatives like the EU’s Horizon Europe program helping to make international connections.
Globally, the World Trade Organization could serve as an inclusive forum to expand discussions and initiatives aimed at furthering the circular economy to distribute wealth, improve the environment and reduce tensions on an international level.
Although consumers may push for a circular economy, firms need strong economic incentives to invest in change. My research provides strong evidence that lucrative international markets reward business investment in circularity. In the face of potential international economic instability, Canada and its allies have incentives to grow and diversify the global economy through circular economy international trade.
The article was previously published in The Conversation.
EDITED BY STACEY NEWMAN
The Canadian economy in the first quarter of fiscal 2025 is being shaped by global uncertainty due to factors such as threats made by President Trump regarding the U.S.-Canada trade relationship, as well as domestic challenges that include Prime Minister Justin Trudeau’s resignation, the prorogation of Parliament, and a federal election in the spring, the likely result of which will be a conservative government with very different priorities and policies.
In January, the Economic Club of Canada hosted its highly anticipated Economic Outlook 2025 breakfast in Toronto and STAY Magazine was there. The event convened policymakers, business leaders, and economists to explore the critical issues shaping the nation’s financial future, and the implications for Canadian hoteliers as we begin a new year that promises to be nothing if not interesting.
Here’s what the country’s top economists had to say about what’s coming down the pike in the first half of 2025.
The opening session addressed the growing uncertainty in both global and domestic contexts. Carol Wilding, president and CEO of CPA Ontario, set the stage for the discussion by emphasizing the need for economic resilience in uncertain times.
Panelists noted that unresolved federal legislative agendas and political instability are eroding investor confidence. Beata Caranci, chief economist at TD Bank, warned that proposed U.S. tariffs of up to 25 per cent on Canadian imports could cut GDP by 2-3 per cent and threaten over two million jobs—a large share in Ontario.
Avery Shenfeld, chief economist of CIBC Capital Markets added that if such tariffs are enacted, the Canadian dollar could weaken to CAD 1.50 per USD. This depreciation might bolster exports but increase costs for imported goods, exacerbating inflationary pressures.
Frances Donald, SVP and chief economist at RBC highlighted the need to prepare for geopolitical shocks by strengthening Canada’s economic “immune system.”
Political instability and potential trade disruptions could impact travel demand and pricing strategies, particularly in regions like Ontario that depend on cross-border tourism and business travel.
Canada’s economic weaknesses were likened to a frail immune system, vulnerable to external shocks. Panelists cited long-standing issues such as regulatory barriers, interprovincial trade inefficiencies, and lagging productivity as obstacles to growth. Frances Donald pointed out that Canada’s regulatory frameworks—especially in energy and housing—are overly complex and deter investment.
Stéfane Marion, chief economist and strategist for the National Bank of Canada argued for urgent reforms to enable industrial growth. He noted Canada’s manufacturing sector has declined by 30 per cent in per capita output over the past two decades, making it the smallest among G7 nations. Frances Donald emphasized the critical need to address inefficiencies in housing construction, which slow the development of much-needed rental units.
Structural weaknesses like housing shortages and energy regulations affect the hospitality industry by increasing operational costs and limiting workforce availability.
Panelists highlighted the economic cost of interprovincial trade barriers, describing them as equivalent to a near-20 per cent tariff. Stéfane Marion called for coordinated federal-provincial action to eliminate these barriers, which impede the free flow of goods, services, and labour.
Douglas Porter, chief economist and managing director of economics at BMO Financial Group noted that resolving these inefficiencies could enhance Canada’s internal market and mitigate risks from external trade shocks, such as potential U.S. tariffs.
Improved interprovincial trade could lower costs for locally sourced goods and services, providing hoteliers with more competitive options for supply chain management and improving regional tourism collaboration.
Canada’s economic growth has been driven by population increases rather than productivity gains, creating vulnerabilities. The country ranks 26th out of 80 of the Organization for Economic Co-operation and Development (OECD) countries in business tax competitiveness. Stéfane Marion and Frances Donald argued for overhauling the tax system to attract investment and encourage innovation. They also highlighted the need to rebuild the manufacturing sector and leverage energy resources responsibly.
Aggressive interest rate cuts by the Bank of Canada in 2024 provided some relief for indebted households, but panelists stressed that monetary policy alone cannot solve structural challenges. Beata Caranci predicted further rate cuts in 2025, likely bringing the benchmark rate closer to 2 per cent. However, she emphasized that sustained recovery requires addressing productivity and competitiveness.
Interest rate adjustments may influence borrowing costs for hotel developments, but long-term stability will depend on broader economic reforms that support investment in the sector.
Implications for Canadian hoteliers
Tax reforms and improved productivity could reduce operational costs and boost disposable incomes, encouraging more domestic and international travel.
The housing crisis was a focal point of the discussion. Despite lower interest rates, supply shortages have pushed homeownership out of reach for many Canadians. Panelists called for targeted measures to incentivize rental housing construction and streamline development approvals. Adjustments to immigration targets—a 20 per cent reduction announced in late 2024—were seen as a short-term necessity to ease housing and infrastructure pressures. However, panelists cautioned that these changes must align with long-term economic strategies.
Implications for Canadian hoteliers
Housing affordability impacts the hospitality workforce, particularly in urban centres. Immigration policies affect the labour pool for roles essential to the industry’s growth and sustainability.
While the discussion highlighted significant challenges, panelists identified actionable strategies for economic resilience:
Diversifying trade partnerships: Reducing reliance on the U.S. through stronger trade relations with other countries.
Investing in innovation: Fostering growth in clean technology and artificial intelligence to boost competitiveness.
Overhauling the tax system: Simplifying the tax environment to attract global investment.
Accelerating housing development: Addressing housing supply issues to support population growth and workforce stability.
These strategies offer a roadmap for adapting to economic headwinds and seizing opportunities to innovate within the hospitality sector.
Balinder Ahluwalia, senior vice president at Mastercard Canada, concluded the event by emphasizing the importance of innovation and adaptability. “Conversations like these equip us to navigate challenges and seize opportunities. Our ability to adapt will shape our success,” he stated.
The Economic Outlook 2025 breakfast illuminated the urgency of coordinated efforts among policymakers, businesses, and communities. Despite looming challenges, strategic action can position Canada for sustainable growth, with benefits extending to all sectors, including hospitality.
As Canada enters a year defined by economic and political uncertainty, hoteliers must adopt a proactive, innovative approach to navigate headwinds and make the most of emerging opportunities. Coordinated action among policymakers, businesses, and communities will be key to fostering resilience and ensuring the long-term success of Canada’s hospitality sector.
What are the key issues hoteliers will be paying attention to within the context of the broader economy?
Resilience amidst uncertainty: Navigating U.S. trade tensions and domestic regulatory hurdles requires strategic planning and adaptability.
Leveraging interest rate cuts: Low borrowing costs provide opportunities for capital investment, but long-term success hinges on addressing structural issues.
Workforce sustainability: Tackling labour shortages through housing partnerships and immigration policy adjustments is crucial.
Innovation and sustainability: Embracing clean technology and sustainable practices can drive efficiency and attract eco-conscious travellers.
WITH MARK KAY PRESIDENT AND PRINCIPAL BROKER, CFO CAPITAL
At STAYMagazine, we spoke with Mark Kay, president and principal broker at CFO Capital to produce this detailed, operational guide for hoteliers seeking to understand specific financing mechanisms in the Canadian industry in Q1 fiscal 2025, in easyto-read, question-andanswer format.
Let’s get granular on financing with Mark Kay!
Q: How have recent interest rate decisions by the Bank of Canada impacted the availability of commercial loans for the hospitality sector in Canada?
The Bank of Canada’s recent interest rate decisions have had a positive impact on the availability of commercial loans across various sectors, including the hospitality industry. Even before the Bank of Canada signalled rate reductions, the hospitality sector, particularly hotels, saw an uptick in the availability of commercial loans. Several factors contributed to this trend:
Strong financial performance: Hotels across Canada have demonstrated resilience, meeting financial covenants and maintaining healthy debt-service coverage ratios (DSCRs).
RevPAR growth: Revenue per available room (RevPAR) has shown consistent growth, driven by strong occupancy and increasing average daily rates (ADR). This stability makes hotels an attractive asset class for lenders.
Sector stability: The hospitality sector has stabilized postCovid, contrasting with challenges faced by other real estate asset classes like office, land development, and residential properties. The
Office and retail: Struggles with remote work trends and shifting consumer behaviour have diminished lenders’ confidence in these sectors.
Condominiums and housing: High construction costs and elevated interest rates have slowed activity in residential markets.
Industrial: Though historically strong, industrial real estate has begun showing signs of slowing demand amid broader economic headwinds.
Land: Due to the limited construction activity across all sectors, lenders‘ land loans are not turning over to construction, hence limited availability to finance further land acquisitions or for refinancing.
As such, lenders are increasingly selective, favouring sectors like hospitality that demon-
strate strong cash flow, operational stability, and a clear path to recovery or growth. This has led to a divergence in lending activity, where hotels are prioritized over less stable asset classes.
While high interest rates have generally constrained borrowing across sectors, the relative strength of the hotel sector means it has remained less impacted. If the Bank of Canada continues to lower rates, we may see further improvements in loan terms for the hospitality sector, including reduced cost of capital and more favourable financing structures.
Q: Inflation rates fluctuated in Canada through the latter half of 2024. How are these trends influencing loan terms, borrowing costs, and overall access to financing for hotel owners and investors?
The fluctuations in inflation rates in Canada through the latter half of 2024 have influenced the lending environment for hotel owners and investors, creating more favourable conditions in terms of loan terms, borrowing costs, and access to financing.
Q: Are you noticing increased caution among lenders when financing hotel developments or acquisitions?
On the contrary, lenders are showing increased confidence in financing hotel developments and acquisitions, despite high construction costs.
While construction costs are at historically high levels on a per-key basis, lenders remain optimistic about financing new hotel projects due to:
Strong market fundamentals: Hotels continue to demonstrate healthy RevPAR growth and operational performance, which supports strong “as-complete” valuations.
Positive cash flow projections: With robust demand in many markets, hotels are delivering stable and predictable cash flow, making them an attractive investment for both hoteliers and lenders.
Sector resilience: Post-Covid recovery in travel and tourism has solidified investor and lender confidence, particularly for well-located and branded developments.
The acquisitions market for hotels is highly competitive, with:
Recent inventory of hotels for sale: An increasing number of hotel investment opportunities are hitting the market, often drawing multiple bids.
Strong lender support: Lenders are backing acquisition financing for hotels, encouraged by healthy performance metrics and stable income streams.
Buyer competition including many new entrants into the hotel space: With multiple bidders for high-quality assets, lenders are eager to finance deals, knowing that hotels have the benefit of being proven to be an inflationary hedge compared to other real estate classes like office, multi-family, industrial or retail.
Impact on Loan Terms and Borrowing Costs
1. Interest rate sensitivity:
i. Hotel lending is primarily driven by cash flow metrics, particularly DSCR and loanto-value (LTV) ratios.
ii. As inflation has moderated and interest rates have eased over the last six months, borrowing capacity has increased, allowing hotel owners to secure larger loans based on improved DSCR metrics.
iii. Competitive lending conditions have also contributed to a reduction in borrowing costs.
2. Improved loan-to-value ratios:
i. Historically, hotel financing in Canada has been capped at LTVs of around 65 per cent. However, increased competition among
lenders has led to higher LTV offerings, with some deals reaching 70-75 per cent for exceptional properties.
ii. This increase in leverage allows investors to allocate less equity upfront, enhancing their returns and enabling more acquisitions or development projects.
3. Flexible amortization terms:
i. Amortization periods have become more flexible, ranging from standard 25-year terms to interest-only options for up to 5 years in certain cases.
ii. These terms provide greater financial flexibility for hotel owners, reducing immediate debt servicing pressures and improving cash flow.
Although there is optimism, lenders do consider:
Location and market conditions: Financing is more readily available for hotels in strong markets or with established demand drivers.
Sponsorship strength: The track record and experience of the hotelier remain critical factors for securing financing.
Expanding Lender Base
1. Increased competition:
i. The Canadian lending market has diversified beyond traditional banks and credit unions. Pension funds, foreign banks, and alternative lenders have entered the space, creating more competitive loan offerings.
ii. This increased competition has driven down interest rates and encouraged more favourable terms for hoteliers.
2. Foreign lender participation:
i. Foreign banks are increasingly active in the Canadian hospitality sector, leveraging lower-cost capital and offering more aggressive terms to secure market share.
Q:
Canada’s GDP growth slowed in late 2024, raising concerns across multiple industries. What specific economic indicators are you watching closely that could signal recovery or further challenges for the Canadian
hotel financing landscape?
As Canada experiences a slowdown in GDP growth in late 2024, several economic indicators will be critical to monitoring the trajectory of recovery or additional challenges in the hotel financing landscape:
Interest rates: The Bank of Canada’s interest rate policy will impact hotel financing. If rates remain high to combat inflation, borrowing costs for hotel projects and renovations will increase, potentially discouraging investment. Conversely, continuous rate cuts could ease financing conditions and encourage the acquisition and construction of hotels.
Inflation rates: Elevated inflation rates, particularly in sectors like energy and construction, can increase operational and development costs for hotels. A decline in inflation would signal easing pressure on hotel profitability and financing feasibility.
1. Broader availability:
i. The strong performance of the hospitality sector, coupled with its resilience to broader economic fluctuations, has made it an attractive asset class for lenders.
ii. Access to financing is robust, even for projects with higher construction costs, as long as cash flow projections remain healthy, and properties meet lender underwriting criteria.
2. Lower cost of capital:
i. With inflation stabilizing and interest rates softening, the cost of borrowing has declined, making financing more accessible and affordable for hotel owners and investors.
Consumer spending and travel trends: Indicators like retail sales and tourism spending reflect consumer confidence and disposable income levels, which directly affect demand for hospitality services. Recovery in these metrics would indicate improved business prospects for hotels.
Unemployment rates: A low unemployment rate signals economic health and can boost domestic travel. Conversely, rising unemployment could suppress demand for leisure and business travel, negatively affecting hotel revenues and investor sentiment.
Energy prices: Fluctuations in oil and gas prices have significant implications for Canada’s economy, particularly in regions reliant on energy exports. Stability or recovery in energy markets could support broader economic growth, benefiting hotel demand.
Q: How do labour shortages and rising operational costs influence lenders’ risk assessments and property valuations in Canada’s hospitality sector?
Persistent labour shortages can lead to service disruptions and reduced operational capacity, which may negatively impact hotel revenues. Hotels forced to offer higher wages or incentives to attract staff may see increased payroll expenses, squeezing profit margins and affecting their ability to service debt. Escalating costs for utilities, food and beverages, maintenance, and other inputs can erode operating profits. Lenders may factor in these risks when calculating DSCR.
Adjustments to valuation models
Potentially lower Net Operating Income (NOI): If labour and operational costs increase at a greater pace than revenue growth, the result is reduced NOI, which is a critical factor in determining property value through the income capitalization approach. As NOI decreases, appraised values for hotel properties decline, potentially affecting the amount lenders are willing to finance.
Increased risk perception may lead to higher capitalization rates being applied in property valuations, further reducing the appraised value of hotel assets.
It’s important to note, that over the past 24 months, we have observed that the average hotel across Canada experienced revenue growth that outpaced the increase in operational costs, resulting in higher profits and elevated property valuations. Looking ahead, industry feedback from hoteliers suggests expectations of flat to modest NOI growth for the coming year.
Lenders are placing greater emphasis on:
Hotel management capabilities: Operators with strong track records in cost control and workforce management are more likely to secure favourable loan terms. Technology adoption: Properties investing in automation and digital tools to offset labour shortages may be viewed more favourably.
4. Differentiation by property type and location
Luxury, upper upscale and upscale hotels: These properties are more labour-intensive and therefore more exposed to rising labour costs, increasing perceived risk.
Select-service and economy hotels: These properties, which require fewer staff and have lower operating costs, are seen as less risky and may retain stronger valuations.
Urban vs. regional markets: Urban hotels may face more significant cost pressures due to higher wage expectations and competition for labour, whereas regional hotels and resorts may experience less strain but also lower demand.
Q: Sustainability is a shifting focus for Canadian hoteliers as energy costs rise and government incentives for green initiatives change. Are lenders offering preferential financing for properties investing in energy-efficient upgrades or sustainability projects or are they backing off Environmental, Social, and Governance (ESG)-driven plans, and how might this trend evolve in 2025?
The focus on sustainability in the Canadian hospitality industry is gradually influencing lending practices, though the majority of lenders still prioritize the financial merits of the hotel itself. However, European banks have indeed taken a more proactive stance toward ESG initiatives compared to their Canadian counterparts. This difference reflects Europe’s regulatory environment, market demand, and the cultural prioritization of sustainability.
Canadian institutions:
1. Limited preferential financing
i. General lending approach: Most Canadian lenders do not provide explicit preferential treatment for sustainability-focused projects. The financial viability and performance of the hotel remain the primary considerations for underwriting loans.
ii. Marketing value: Lenders are increasingly recognizing the marketing value of aligning with sustainability and ESG initiatives. Supporting green projects can enhance a lender’s reputation and demonstrate commitment to social responsibility.
2. Flexible DSCRs
i. The few lenders with ESG-specific programs, offer more flexibility on DSCR requirements for hotels undertaking energy-efficient upgrades or sustainability projects. This allows borrowers to secure higher leverage, reducing upfront capital constraints for green investments.
3. Government and infrastructure funding leading the way
i. Canadian Infrastructure Bank (CIB): The CIB is a leading example of public funding sources driving ESG initiatives. Programs like the one used by the Fairmont Royal York Hotel (which we are currently arranging re-financing) which achieved Zero Carbon Building Standards Certification through an energy retrofit—demonstrate the potential for cost-effective decarbonization projects.
ii. Public-private partnerships: Partnerships between governments, infrastructure banks, and private lenders are increasingly facilitating sustainability-focused investments.
4. The evolution of ESG lending in 2025
i. Green loan program expansion: As sustainability becomes more central to business strategies, more Canadian lenders may introduce green loan programs tied to ESG outcomes. These programs could include reduced interest rates or favourable terms for energy-efficient retrofits and carbon reduction initiatives.
ii. Incentives for certification: Hotels seeking certifications like LEED (Leadership in Energy and Environmental Design) or Zero Carbon Building Standards could gain preferential access to funds, further driving the adoption of green practices.
Q: With technology playing an increasing role in the hotel industry, including investments in revenue management tools and guest experience platforms, do you see lenders taking these upgrades into account when evaluating loan applications or property valuations in Canada?
Technology investments in the hotel industry, particularly in revenue management tools and guest experience platforms, are beginning to influence lenders’ evaluations of loan applications and property valuations in Canada. As technology becomes a critical component of a hotel’s operational strategy and long-term profitability, lenders are starting to recognize its importance.
1. Enhanced operational efficiency
i. Revenue management tools: Advanced revenue management systems (RMS) help hoteliers optimize pricing strategies, manage inventory, and forecast demand more accurately. These tools can lead to improved occupancy and ADRs, which directly impact a hotel’s revenue and cash flow. Lenders are likely to view hotels that have implemented these tools as more financially stable and capable of generating higher and more predictable cash flows. This can influence the DSCR, improving the chances of loan approval or better financing terms.
ii. Guest experience platforms: Technologies such as mobile check-ins, personalized guest services, and AI-driven recommendations enhance guest satisfaction and loyalty. High guest satisfaction can lead to repeat bookings, positive reviews, and increased brand value, which are all valuable for longterm profitability. Lenders recognize that a strong guest experience can increase a hotel’s competitive edge, leading to higher occupancy and customer retention, both of which strengthen financial performance and, therefore, improve loan prospects.
2. Impact on property valuations
i. Improved performance metrics:
Hotels with integrated technology platforms often report better operational performance, such as increased RevPAR and reduced operational costs. These improvements can raise a hotel’s NOI, which directly influences its valuation. Lenders using the income capitalization approach to assess property value may give more favourable valuations to tech-savvy hotels, as these upgrades can lead to stronger, more stable financial results over time.
3. Risk reduction and management
ii. Data-driven decisions: Revenue management tools and guest experience platforms often use advanced analytics and datadriven insights to help hoteliers optimize operations, predict demand, and respond to market changes. This reduces operational risk and enhances decision-making. Lenders value technology that improves risk management, as it provides hotels with a better ability to navigate market volatility and operational challenges, reducing the likelihood of loan defaults.
2025 outlook from here
Going forward, hotel owners and investors can expect:
Continued support from a broad range of lenders.
Increasing competition driving down costs and improving terms.
Higher LTVs and flexible amortization schedules as lenders compete for deals in a highperforming sector.
The U.S. economy remains a key driver of Canada’s economic activity. As we move through the first quarter of 2025, the U.S. economic policies under President Donald Trump’s administration are poised to potentially influence Canada’s economic landscape including the hospitality sector.
President Trump has announced plans to implement tariffs on Canadian imports. For the hospitality industry, these trade tensions may lead to increased costs for imported goods and services, potentially squeezing profit margins. Additionally, retaliatory tariffs from Canada could further exacerbate supply chain challenges, impacting the availability and pricing of goods essential to hospitality operations.
The proposed tariffs could increase inflation rates in Canada. Higher inflation typically leads to increased interest rates as central banks attempt to control price levels. For the hospitality sector, elevated interest rates can result in higher borrowing costs, affecting capital investment decisions and expansion plans.
Mark Kay is the president and principal broker at CFO Capital. The company, founded in 2004, is a national commercial mortgage brokerage firm dedicated to providing a consistent flow of capital across all real estate sectors, with a focus on hospitality. The firm is powered by a team of over 20 former commercial bankers and operates from its head offices in Ontario, Quebec, Halifax, British Columbia, and its newest branch in Saskatchewan, which oversees operations across the prairies.
CFO Capital arranges approximately $1.5 billion in mortgage loans annually, facilitating more than 100 transactions while maintaining an acute understanding of the Canadian lending landscape. The firm partners with an extensive network of lending institutions, including chartered banks, credit unions, trust companies, pension and insurance funds, foreign financial entities, and local private lenders and mortgage investment corporations.
The
WITH ED KHEDIGUIAN SENIOR VICE PRESIDENT, FRANCHISE FINANCE, NATIONAL BANK
A strategic overview of market dynamics and macroeconomic trends shaping the hotel financing landscape from industry expert and STAYMagazine editorial advisor, Ed Khediguian.
The recent availability of commercial loans for the Canadian hospitality sector has been influenced more by market dynamics than by direct changes in interest rates. Specifically, the sector has seen an influx of new lenders and an expansion of the appetite among existing lenders. This shift can be attributed to several macroeconomic factors. The hospitality sector demonstrated strong performance during and especially immediately post-pandemic, aided by limited new hotel supply and room conversions for alternative housing purposes. These factors allowed hoteliers to raise average daily rates (ADRs) significantly, signalling to investors that hotels are a robust inflation hedge compared to other real estate classes. Structural declines in other real estate segments, such as office and industrial spaces, have pushed lenders to seek
opportunities in the hotel sector. Reduced capital availability for office properties and overbuilding in industrial spaces have made hotels a more attractive investment for yield-seeking lenders. Additionally, non-traditional hotel investors are entering the hospitality market, bringing their existing relationship lenders along. This has further expanded the pool of capital available to the sector. While falling interest rates have encouraged investors to initiate or revisit projects, the primary driver of increased financing remains the evolving market dynamics.
Immediately following the pandemic, lenders exhibited significant caution in financing hotel developments. While this caution persists, there has been a gradual easing, especially for wellplanned projects in strong markets with limited
new supply. Acquisition financing, on the other hand, has seen stable and improving conditions. As interest rates decrease and ADRs sustain their levels and grow further, development financing is expected to continue expanding.
The latter half of 2024 saw fluctuating inflation rates in Canada, directly impacting loan terms and borrowing costs for hotel owners and investors. Higher inflation and interest rates have driven up the weighted average cost of capital. Hotels face higher operational costs; however, strong ADR growth has often offset these increases, leaving earnings stable or improved. Despite cost pressures, hotel valuations remain robust, currently exceeding pre-Covid levels, ensuring continued access to capital for the sector.
The U.S. economy plays a significant role in shaping Canada’s hospitality sector. With the Trump presidency and ongoing tariff policies, several factors are influencing Canadian lending conditions. Tariffs are dampening corporate travel, particularly in Ontario and Quebec, while resource markets may see a boost from U.S. energy policies. The Canadian dollar's depreciation against the U.S. dollar, coupled with safety concerns in international markets for U.S. citizens, is likely to increase U.S. tourist volumes in Canada. While the overall impact may be neutral, regional differences in performance will depend on specific economic drivers.
As Canada’s GDP growth slows, key economic indicators for the hospitality financing landscape include manufacturing and tourism. Ontario and Quebec's manufacturing sectors face challenges, with potential recovery linked to resource sector policies. A weak Canadian dollar is expected to keep domestic travel strong and attract U.S. tourists, bolstering the hospitality sector.
Labour shortages and rising costs are affecting lenders’ risk assessments and valuations of hotel properties, especially for full-service, convention, and luxury hotels. These segments face higher fixed labour costs and operational complexities. To mitigate risks, lenders are incorporating conservative covenants to ensure liquidity, particularly for assets with significant labour dependencies.
A weak Canadian dollar is expected to keep domestic travel strong and attract U.S. tourists, bolstering the hospitality sector.”
As technology becomes integral to hotel operations—ranging from revenue management tools to guest experience platforms—lenders increasingly rely on brand performance metrics rather than specific technology investments. Strong brand performance often serves as a proxy for effective technology deployment.
The Canadian hospitality industry is in an expansionary period, with performance and valuations surpassing pre-Covid levels. As interest rates decline over the next 12 to 18 months, new supply development is expected to accelerate. However, this new supply will take years to materialize, potentially ushering in a more challenging economic cycle marked by increased competition, over-leverage, and reset risks. In summary, the Canadian hospitality sector’s financing landscape is being shaped by a combination of market resilience, strategic shifts in lender focus, and evolving macroeconomic conditions. While challenges persist, the sector’s robust performance and strategic positioning signal a promising outlook for investors and lenders alike.
KHEDIGUIAN
As senior vice president of CWB Franchise Finance, which has been acquired by National Bank, Ed Khediguian is responsible for overseeing all aspects of the mortgage and asset-based lending business to the hotel and restaurant sectors. He has over 23 years of experience in the lodging, hospitality and restaurant industries.
Before joining CWB, Khediguian led GE Capital’s franchise finance division for over 12 years, was director of a private equity fund for the Caisse de dépôt et placement du Québec (CDP Capital), worked for KPMG’s consulting and corporate finance group in Montreal and Toronto, and worked for Remington Hotels Corp. out of Dallas, Texas.
FROM OMNIGENCE ASSET MANAGEMENT
While financing trends underscore the resilience of Canada’s hotel sector, sustaining this momentum requires addressing broader structural pressures.
Rising inflation, energy costs, and demographic shifts are compounding operational challenges, particularly as stagflation risks heighten economic uncertainty. These forces tie back to earlier discussions on strategic investments, as hoteliers must balance immediate financial opportunities with long-term resilience. The next section explores how the industry can navigate these pressures through targeted strategies in efficiency, workforce planning, and sustainability to secure future growth.
As Canada’s economy faces the forces of rising inflation and sluggish growth, and the threat of tariffs on Canadian goods by the U.S., Canada may enter a period of stagflation. A report from Omnigence Asset Management, “Is Canadian Growth Dead? Preparing for Stagflation and the Socio-Economic Barbell,” provides an analysis of the economic pressures that could shape the next three decades. These include housing shortages, increasing energy costs, a declining middle class, and stagnating real GDP per capita. Canadian hoteliers, already dealing with evolving consumer behaviour, must now adapt to this new economic landscape.
The report highlights how Canada’s housing supply deficit—estimated at more than 3 million units—has created ripple effects across the economy. For the hotel industry, this shortage impacts workforce housing, particularly in urban and remote regions where staff accommodations are critical. Combined with Canada’s population growth rate, which is among the highest in the developed world at over 2.7 per cent annually, this exacerbates demand pressures without sufficient infrastructure to support it.
Energy costs have also risen dramatically, nearly tripling as a share of GDP compared to historical averages. These higher expenses directly affect hotel operations, from utilities to transportation. Omnigence notes that energy prices now consume 8 per cent of GDP, compared to a long-term average of 4 per cent—a stark reminder of how external costs can disrupt profitability.
One of the most significant trends identified in the report is the erosion of the middle class, a phenomenon Omnigence calls the “socio-economic barbell.” Between 1971 and 2021, the share of adults in middle-income households dropped from 61 per cent to 50 per cent. At the same time, the proportion of lower- and upper-income households has increased. This restructuring is reshaping consumer habits, with implications for hotels:
Budget-conscious travellers are likely to seek out affordable options, from economy hotels to extended-stay properties. These preferences align with reduced discretionary spending, driven by higher costs of living and limited wage growth.
High-income travellers, on the other hand, may sustain demand for boutique and luxury accommodations, which could buffer parts of the industry from broader economic pressures.
The report also notes the long-term weakening of the Canadian dollar relative to the U.S. dollar, could make Canada a more attractive destination for international visitors. This dynamic creates an opportunity for hotels to increase their focus on marketing to foreign tourists.
Omnigence underscores the need for operational resilience to address the pressures of stagflation. For hoteliers, this means adopting targeted strategies to manage costs and capture emerging opportunities:
Energy efficiency: Investing in energy-efficient technologies, such as smart HVAC systems and renewable energy sources, can reduce costs in a time of persistently high energy prices. These initiatives also align with guest preferences for sustainability.
Workforce investments: High housing costs and labour shortages make it critical to provide competitive wages and, where possible, housing assistance for employees. Retention efforts can mitigate the costs associated with the constant turnover in a tight labour market.
Digital transformation: Tools like AI-based pricing systems, automated check-ins, and enhanced data analytics can streamline operations and enhance guest experiences, allowing hoteliers to do more with fewer resources.
Canada’s economic fundamentals suggest a prolonged adjustment period. Real GDP per capita, which has stagnated since 2013, is projected to remain unchanged until the 2050s, according to Omnigence’s modelling. During this time, inflation is expected to remain above historical averages, further straining middleincome earners and small businesses.
The report also flags demographic trends, particularly Canada’s aging population, as a critical driver of economic change. By 2050, the dependency ratio—defined as the number of people of working age for every retiree—will drop to 2.2, down from 4.4 in 2010. This shift will increase demand for tailored services, such as accessible accommodations and wellness tourism, providing new opportunities for hotels to innovate.
Omnigence’s analysis indicates that stagflation is not merely a theoretical risk for Canada but a tangible reality. The report suggests that businesses, including hotels, need to focus on inflation-resistant investments and strategies aligned with long-term demographic and economic trends.
Omnigence Asset Management specializes in macroeconomic analysis and investment strategies for complex economic environments. The report “Is Canadian Growth Dead? Preparing for Stagflation and the Socio-Economic Barbell” was authored by Omnigence directors shown above left to right: Barclay Laughland, data scientist Keenan Viney, Matt Barr and Stephen Johnston.
BY TROY TAYLOR, VP STRATEGIC PARTNERSHIPS AND MARKETING, FOODBUY CANADA
There is no question that we are facing an uncertain year ahead and the hospitality sector is adjusting to the new realities. In a recent podcast that I participated in with Tony Elenis, president of the Ontario Restaurant Hotel & Motel Association (ORMHA), I was asked what to expect in 2025. The phrase I used then was, “2025 is going to be a bumpy ride.” I don’t see anything to change that opinion. With Prime Minister Trudeau now stepping aside, this has provided some with the renewed optimism that comes with change. Then again, what is in store via “the Trump effect?”
With the economy projected to continue with lower growth and higher interest rates, this directly affects consumers’ disposable income and businesses' operating costs. This softness will apply pressure on both the supply and demand sides of the equation.
If the Bank of Canada remains stubborn on rates, the result will be slower investment in new builds, expansions and renovations as projects face higher financing costs. International investors may also pause before committing to Canada. This could put pressure on the supply side, where Canada is already behind pace in keeping up with room demand. I have had the chance to speak with most of the provincial hotel association leaders and they all indicated more rooms are needed, right across the board.
The optimist in me would point to a recent Financial Post article by real estate reporter, Shantaé Campbell, where she writes: "Marriott International Inc. has dozens of new hotels in its Canadian pipeline, while Hyatt Hotels Corp. is set to more than double its footprint with 23 new locations by the end of 2026." This is good news. We know the pandemic paused many new builds and major renovations, meaning the efforts to catch up are ongoing.
Hotels usually set aside reserve funds for investments on five to seven-year cycles. Higher borrowing costs are forcing some operators to conduct renovations on a piecemeal basis. The challenge with that is being able to deliver a consistent guest experience, plus it is not necessarily cost-effective.
Inflation will continue to cause issues with energy prices and labour costs, and we can expect supply chain disruptions. To compound this, hotels are facing price sensitivity from travellers. While demand in some areas is returning, hotels may need to increase rates to offset rising costs. However, they must balance rates against price-sensitive consumers.
RBC's latest Consumer Tracking Report reveals that: “Canadian consumers are tapped out." And that recent retail spending is "nothing short of abysmal." These consumer cutbacks are also being felt hard across the restaurant sector and ultimately this will impact hotel F&B operations.
Additionally, most hotels have already adjusted their rates, capitalizing on the post-pandemic splurge and to better reflect comparable pricing to similar North American markets. If you have travelled recently, you will have likely experienced sticker shock. This means that pulling the price lever in 2025 will become a little more difficult.
1
Domestic travel has been a lifeline for the sector due to lingering uncertainties from international travellers, compounded with higher airfare prices. Hotels can adapt by offering experiences tailored to regional tastes and promoting destinations that are less dependent on international travellers. Hotels should develop packages that highlight unique experiences and draw attention to local attractions to encourage weekend stays.
2
Guests are also increasingly seeking authentic travel “experiences” that allow them to connect with local culture and communities. Hotels that collaborate with local artisans, guides, and chefs offering immersive experiences and activities such as cooking classes, cultural tours, and local art displays will be ahead of the curve.
3
Leaving the whole Carbon Tax issue aside, travellers are increasingly prioritizing eco-friendly accommodation. Hotels will need to continue to invest in greener technologies and services to meet the needs of eco-conscious travellers.
The planet’s health goes hand in hand with our personal health. Hotels that focus on mental, physical, and emotional well-being will lead the pack. Wellness amenities including yoga studios, spa services, nutritious dining options, sleep-focused rooms, and even mindfulness programs are all on the rise. The emphasis should be on creating a “holistic wellness environment” that supports the planet and guests' health during their stay.
4
Working remotely and working-from-home is here to stay. This allows consumers to take advantage of flexible work schedules to explore new destinations. Hotels need to adapt by combining business amenities like high-speed internet and smaller meeting rooms with leisure activities such as local tours or wellness offerings. This is now about embracing the new reality of hybrid leisure travel.
Increasing operational efficiency will be critical as hotels deal with rising costs. Investment in technology, such as energy-efficient HVAC systems, automated check-ins, and AI-powered booking platforms, can help reduce overhead costs while improving guest satisfaction.
Additionally, streamlining staffing and training employees to handle multiple roles can help mitigate labour shortages. At Foodbuy, we are helping operators look across the whole supply chain for optimization opportunities to drive cost savings. Operators should look to leverage purchasing expertise to keep costs in check and to be abreast of the multitude of new products hitting the marketplace.
Personalization is coming at us from everywhere and will be a tool for boosting guest loyalty. Offering things like contactless check-in, in-room smart controls, and tailored guest services can enhance the guest experience.
If you haven’t dealt with an AI concierge yet, you will soon. AI companies have created life-like bots to respond with highly tailored answers to specific guest inquiries about the hotel or surrounding area/activities. They also incorporate guest-related information like reservation status, loyalty memberships, booking sources, etc. A new age is dawning!
“Technology may be influencing every aspect of everyday life, but it’s not a replacement for personal service and human-level hospitality. Hotels have to approach every investment and enhancement by examining what excites their guests, what inspires their employees, and ultimately, what will drive revenue for their business.”
—“Hospitality in 2025: AUTOMATED, INTELLIGENT… AND MORE PERSONAL” report from Skift & Oracle Hospitality.
While 2025 will pose significant challenges, there are opportunities for hotels that are agile, innovative, and responsive to these market dynamics. By keeping an eye on these trends combined with strategic investments, the hotel sector can successfully navigate the tough times ahead and emerge stronger through 2025 and beyond.
About the Author
Troy Taylor is a 30-year veteran in the foodservice, hospitality and retail sectors where he has held senior roles with Labatt and PepsiCo. Taylor also helped serve the industry through Restaurants Canada where he played a key role in helping operators survive through the pandemic, one of the most trying times in the history of the foodservice industry.
Troy currently manages Foodbuy Canada’s publications that provide actionable insights and purchasing solutions and cost-saving innovations to over 20,000 hospitality and foodservice operators across the country. Foodbuy Canada is a Compass Group Canada Company.
Building relationships and lasting success for hospitality partners
For Canadian hoteliers looking to refine their procurement processes and enhance their operations, Afsar Ali Khan offers a wealth of experience and insight. As managing director, client relations Canada at Avendra International, Khan brings over 35 years of expertise across multiple markets, including North America, Asia, and the Middle East. His approach to hospitality combines a practical focus on efficiency with a personal commitment to meaningful relationships and community impact.
Afsar Ali Khan’s interest in hospitality started early. Growing up in Delhi, India, he was drawn to the industry’s energy and diverse opportunities. After earning a degree in business and hospitality management, he began his career in procurement, gradually expanding into hotel operations.
“My passion for this industry began at a young age,” Khan says. “The dynamic and glamorous nature of hospitality captured my attention, and I knew I wanted to be part of it. What has kept me engaged over the years is the deep fulfillment I get from building relationships and providing exceptional service.”
In 2001, he moved to Canada from Dubai and joined Avendra International, a company known for its supply chain and procurement solutions. Avendra was just beginning its expansion into Canada, and Khan saw an opportunity to help shape its approach in a new market.
“I was excited to apply what I’d learned in Dubai and adapt it to meet the needs of hotels here,” Khan explains. “Hospitality has always been about people, and I wanted to make sure the solutions we offered aligned with the realities of this industry.”
Avendra International focuses on supply chain management and procurement services. The company helps hotels manage costs while maintaining high-quality standards. With a network
of over 2,500 suppliers and $20 billion in collective purchasing power, Avendra aims to offer competitive pricing and tailored solutions to fit each property’s unique needs.
Khan describes his role as a blend of strategic planning and hands-on collaboration. “Our mission is to provide innovative procurement solutions with personalized local service. We enable hotels to focus on their core operations— delivering exceptional guest experiences—while we manage procurement challenges.”
Khan also emphasizes the importance of local expertise in Avendra’s approach. “Canadian hotels have their own challenges, whether it’s regional regulations or supply chain issues during winter. Understanding these specifics is key to building trust and delivering real value,” he says.
Building trust through empathy and persistence
One of Khan’s greatest strengths is his ability to build strong, enduring relationships with clients
and suppliers. He attributes this success to empathy and active listening.
“Every client is different, and their needs change over time. I focus on listening and understanding their perspective, so I can provide meaningful support,” he says. “Patience and persistence are important too. Relationships take time, but the trust you build is worth it.”
This approach has helped Khan lead several successful initiatives, including the Avendra Canada Supplier Show. Starting as a small event, the show has grown into one of Canada’s largest hospitality networking events, connecting suppliers and clients to share ideas and solutions.
Another example of his commitment to relationships came during the Toronto blackout. “I visited hotels in person to show them Avendra was there to assist in any way possible. One hotel even gave me an award for going out of my way to support them,” Khan recalls.
During the G7 Summit in Toronto, he ensured suppliers could deliver to hotels in restricted zones and worked to find alternative suppliers for those areas. “Our goal is always to ensure there’s no noticeable impact on the guest experience,” he explains.
Khan’s focus on people extends beyond the workplace. During the pandemic, he organized food drives to support hospitality workers who had lost their jobs and worked with suppliers to ensure unused inventory went to those in need.
“Hospitality isn’t just about hotels—it’s about the people who make the industry work,” Khan says. “Being able to give back, even in a small way, felt important.”
A former international field hockey player for the United Arab Emirates and a Canadian soccer referee, Khan credits his experiences in
sports for shaping his perspective on teamwork and leadership.
“Teamwork is about trust and shared goals, whether it’s on the field or in business. That perspective has helped me build stronger partnerships over the years,” he reflects.
Khan sees the Canadian hotel industry evolving rapidly, with increasing demand for sustainable practices, innovative guest experiences, and efficient operations.
“Guests are looking for eco-friendly and personalized options, and hotels need to deliver those while staying cost-effective,” he says. “Our role at Avendra is to help them meet those demands in a practical way.”
One of the tools helping hotels adapt is Avendra’s Mosaic AI Supply Chain platform, which provides detailed data on suppliers and operations. “The more information hotels have, the better they can make decisions that balance cost, quality, and sustainability,” Khan explains.
Reflecting on his career, Khan emphasizes the importance of adaptability, empathy, and a willingness to learn. “This industry changes constantly, and leaders need to stay flexible while keeping customer service at the centre of what they do,” he says.
He also sees mentoring the next generation as a personal responsibility. “I’ve worked in many different roles in hospitality, and each one taught me something valuable. I encourage new leaders to stay curious and learn from every experience.”
For Khan, the future is full of potential. “The Canadian hotel industry is growing, and there’s a lot of room for innovation,” he says. “What excites me most is the chance to work with clients to help them achieve their goals in ways that benefit their business and their guests.”
Khan’s career stands as an example of how empathy, collaboration, and a customer-focused approach can drive success. For Canadian hoteliers, his insights and leadership offer a blueprint for navigating a competitive market.
Sarvin Construction is a privately owned construction and procurement company with over 10 years of experience. Our expertise is Renovating Hotels! Contact us today to talk about your hotel renovation or procurement needs including Pre-Construction, Construction Management, Project Management(Build/Design) & General Contracting
RAJ NAGASAAMI
sarvinconstruction@gmail.com CONTACT
Our most recent hotel renos include: Super 8 Cornwall, Holiday Inn Whitby, Aloft Vaughan Mills, Radisson Hotel Toronto, Hilton Airport Hotel Toronto, Towne Place Suites Mississauga and Strathcona Hotel Toronto
GRANT ALEXANDER WILSON, ASSOCIATE PROFESSOR, HILL AND LEVENE SCHOOLS OF BUSINESS, UNIVERSITY OF REGINA
Across Canada, the demand for rental housing is intensifying. The unprecedented demand for rentals is a result of several factors, including Canada’s population growth, ongoing inflation, constraints on the existing rental stock and obstacles related to the construction of new apartment buildings.
In the middle of 2023, Canada’s population eclipsed 40 million people. Currently, the World Bank estimates the population to be 41.3 million people—with expectations to reach 44.8 million people by 2040.
The biggest driver of such population growth has been described as “migratory increases” or, more simply, immigration. As a result, the demand for housing—specifically rental housing among new Canadians—has increased and is expected to continue to grow.
For many Canadians, homeownership remains out of reach. A report from RBC found that 68 per cent of Canadian households are unable to buy a home due to inflation and wage stagnation.
Together, inflation and wage stagnation have created demand for rental housing. Nobel Prize-winning economist Milton Friedman once described inflation as “taxation without legislation.” Wage stagnation is the phenomenon that occurs when wages lag behind inflation as a result of the two not moving in lockstep.
My recent research shows that indeed, two-thirds of Canadians are in unaffordable housing situations, making the proverbial dream of homeownership unlikely—or at the very least delayed significantly.
Homeownership rates in Canada.
Mortgage and Housing Corporation)
Not surprisingly, over the last five years, homeownership rates in Canada have fallen from 68.5 per cent to 66.2 per cent and declines are projected to continue.
This downward trend underscores the growing reliance on rental housing as an alternative—but the current rental market is ill-equipped to handle the demand.
The answer to Canada’s housing crisis isn’t as simple as building new rental units. As my previous work has shown, almost half of Canada’s rental properties (1,026,020 units) were built between 1960 and 1979.
Put differently, over 80 per cent of the rental properties in Canada were constructed before the year 2000. These older units remain the backbone of the rental market, but many need to be modernized to remain viable.
While policymakers and the real estate industry have traditionally focused on the construction of new properties, equal attention should be paid to maintaining and preserving older ones as to building new ones.
The dual challenge of constructing new rental properties and preserving existing ones requires the real estate industry and governments to adopt a dual focus on both new developments and upgrading existing rental properties.
To effectively plan and manage the existing and forthcoming challenges in the rental market, both the private sector and governments need to focus on making investments for the long-term.
Playing the long game will result in the greatest value creation for society and businesses. In real estate, this includes consciously and deliberately committing to innovation, such as retrofits and energy efficiency upgrades. Doing so requires the shift of thinking from fiscal years to decades.
For rental property operators, this process starts with investing in existing properties. Financialized operators—those that have sophisticated management, utilize multiple sources of capital and operate in a variety of geographies—are perhaps the best positioned to do this. They have the financial means and scale of ownership to upgrade and modernize existing rentals, ensuring they can meet the rental demands of today and tomorrow.
Financialization is a natural progression for industries as they grow in size and scope. In the context of real estate, financialized operators are large, sophisticated and often securitized, meaning assets are pooled together and turned into financial products for investors.
Beyond their financial and operational abilities, financialized operators have a broader responsibility to a diverse group of stakeholders beyond shareholders. New research has shown that financialized firms have deep environmental
Number of rental properties in Canada. (Canada Mortgage and Housing Corporation)
1960-1979
social and corporate governance commitments that emphasize other stakeholders such as renters and society at large.
Of course, it’s also important for the industry to invest in new property construction to help combat the intensifying demand for rentals. However, adding to the rental universe is complex, bureaucratic and often doesn’t address affordable housing solutions.
The cost-push inflation—when input costs increase the price of final goods—of materials makes new builds more appealing than affordable housing. Cost-push inflation results in higher prices. Nevertheless, “building anything helps everything” when it comes to rentals.
The federal government’s $1.5 billion investment to purchase existing apartment buildings to protect and maintain affordable rental units is an important step in the right direction, but it isn’t enough.
Collaboration between governments and the real estate industry is needed to make a deeper impact. While the importance of preserving existing rental properties is well understood, to date there is only one affordability program for aging and existing stock in Canada.
To make a significant impact, more programming and incentives need to be established for operators—particularly those that are financialized and well-equipped to create large-scale change.
The private and public participants need to collaborate to enact and engage in initiatives that reduce costs and prioritize affordable rental housing and the preservation of existing rental stock for Canada’s long-term interests and sustainability.
This article was previously published in The Conversation.
BY STACEY NEWMAN
Four First Nations united under a newly created entity, Atenro, have announced a partnership with InnVest Hotels to acquire a majority stake in Hilton Québec. Hilton will continue to manage the hotel.
The agreement marks a significant step in strengthening the economic participation of First Nations in several sectors of Quebec, including the hotel industry. Several First Nations already own or share hotel establishments in Quebec. The partnership reflects a shared vision of economic self-sufficiency, cultural preservation, and sustainable development. The deal, supported by InnVest Hotels, includes Hilton retaining management of the property.
Atenro—a name that means “friendship” in the Wendat language—represents the combined efforts of the Naskapi Nation of Kawawachikamach, the Huron-Wendat Nation, the Mi’gmaq of Gespe’gewa’gi, and the James Bay Cree Nation. This historic collaboration highlights the growing role of First Nations in shaping Quebec's economic landscape.
The Hilton Québec has long been an icon of Quebec’s hospitality landscape. Opened in 1974, the hotel was built to accommodate the influx of visitors expected during the 1976 Montreal Olympics. The property was envisioned as a flagship venue that would enhance the province’s tourism sector.
Designed by architect Dimitri Dimakopoulos, the hotel features a modernist style that reflects the architectural trends of the 1970s. With 23 storeys and 569 rooms offering panoramic views of Quebec City, the Hilton quickly became a landmark in the city’s skyline. Over the decades, it has hosted numerous dignitaries, events, and conferences, cementing its reputation as a key player in the hospitality sector.
In 2020, the Hilton underwent a $70-million renovation to update its rooms, meeting spaces, and public areas, ensuring it remained a competitive destination for both business and leisure travellers. The renovation also reinforced its position as a venue of choice for large-scale events, given its direct connection to the Québec City Convention Centre.
“Hilton Québec is a high-performing hotel in our portfolio, and this very important agreement with our First Nations partners in Quebec allows us to unlock the value of this property while providing a dynamic new investment opportunity for new owners. Our InnVest team will continue to be actively involved with the hotel as asset managers for the new partnership. We are thrilled to welcome the Naskapi Nation of Kawawachikamach, the Mi’gmaq of Gespe’gewa’gi, the Huron-Wendat Nation, and the Cree Nation on this exciting journey,” says Lydia Chen, CEO of InnVest Hotels.
Each participating nation brings its own distinct heritage and aspirations to the project.
The Naskapi Nation of Kawawachikamach is Quebec’s only Naskapi community, located near Schefferville in the northeast. With a population of over 1,500, the Nation was a signatory to the Northeastern Québec Agreement in 1978, one of Quebec’s modern treaties. Naskapi leadership emphasizes the importance of strategic investments outside their territory to support sustainable growth.
“This acquisition is a concrete example of how First Nations can play a key role in Quebec’s economic development while preserving and enhancing their unique cultural heritage. The development of our communities also requires strategic investments outside the territory,” says Louise Nattawappio, chief of the Naskapi Nation.
The Huron-Wendat Nation, based in Wendake, north of Quebec City, has a rich history of trade and alliances. With a population of about 5,000, the Nation is guided by traditions of collaboration and innovation. Grand Chief Pierre Picard describes the acquisition as a continuation of the Wendat people’s ancestral legacy of economic partnerships.
“The Wendat Nation is proud of this major investment, which is also found on its magnificent territory, the Nionwentsïo. It is even more significant since it is sealed by an economic alliance with the Eeyou, the Mi’gmaq and the Naskapi. This historic transaction honours the memory of the Wendat ancestors who once had an important network of trade and trade alliances. We continue in the same tradition and set an example for our younger generations where collaboration, ambition and visions can converge into concrete successes that promote our financial independence,” says Picard.
The Mi’gmaq of Gespe’gewa’gi, represented through Mi’gmawei Mawiomi Resources LP, encompass three Mi’gmaq communities in Gaspésie: Gesgapegiag, Gespeg, and Listuguj. Their economic arm invests in projects aligned with Mi’gmaq values, ensuring long-term benefits for their people.
“Our new partnership demonstrates the willingness of Indigenous communities to invest in the economy in a sustainable way and to strengthen their financial self-sufficiency. The revenues generated by our other investments, such as wind, allow us to diversify our investments,” offers Fred Vicaire, CEO of Mi’gmawei Mawiomi Business Corporation, the general partner of Mi’gmawei Mawiomi Resources LP.
The James Bay Cree, represented by the James Bay Eeyou Corporation, have a long history of balancing traditional ways of life with modern economic opportunities. Founded under the 1986 La Grande Agreement with Hydro-Québec, the corporation’s mission includes promoting Cree culture, improving social conditions, and fostering economic development.
“By investing in hospitality properties, we have the opportunity to create spaces that showcase our heritage and allow visitors to learn more
about our cultures. It also strengthens our economic position and financial autonomy, while contributing to the sustainable development of our communities,” states Henry Gull, president of the James Bay Eeyou Corporation.
The acquisition represents more than a financial milestone. It reflects a commitment to cultural preservation and economic autonomy. Leaders from the four Nations envision the hotel as a space to share their heritage with visitors while supporting sustainable development.
Atenro has outlined several plans for the development of Hilton Québec:
• Cultural Integration: The new owners aim to showcase Indigenous heritage within the hotel. This includes incorporating elements of Indigenous design, crafts, cultural activities, and unique dining experiences to provide guests with an immersive cultural experience.
• Employment and Training Opportunities:
Atenro plans to collaborate with Hilton Québec and InnVest Hotels to offer employment and training programs specifically for members of all First Nations. This initiative is designed to empower Indigenous communities by providing valuable skills and job opportunities in the hospitality sector.
• Community Impact: The partnership is committed to maintaining all current jobs at the hotel, recognizing the exceptional quality of work by the existing team. By preserving these positions and introducing new opportunities, the collaboration aims to have a positive impact on the local community, fostering economic growth and cultural exchange.
• Economic Benefits for Participating First Nations: The acquisition is expected to strengthen the economic position and financial autonomy of the involved First Nations. By diversifying their investments in the hospitality industry, they anticipate sustainable development and increased revenues, which can be reinvested into their respective communities. This strategic move aligns with their broader goals of achieving financial self-sufficiency and supporting community development initiatives.
In addition to its storied history, the Hilton Québec continues to play a vital role in the city’s hospitality scene. The hotel is located steps from Old Quebec City, a UNESCO World Heritage Site, and adjacent to Parliament Hill, featuring 569 rooms and suites with panoramic views of the city.
Hilton Québec boasts the largest ballroom in Quebec City, along with 22 meeting rooms spanning 23,000 square feet. With two restaurants, a bar, a fitness centre, and a heated outdoor pool, the hotel is directly linked to the Québec City Convention Centre, making it a prime destination for both business and leisure travellers.
The acquisition has been hailed as a blueprint for Indigenous-led ventures in diverse sectors. Quebec’s Minister of Indigenous Affairs, Ian Lafrenière, has commended the initiative, describing it as a testament to the growing influence of Indigenous communities in the province’s economy.
The new owners plan to maintain a strong focus on sustainability and cultural pride, ensuring the hotel’s success benefits their communities for generations. By combining economic expertise with deep cultural roots, this partnership exemplifies how collaboration can drive both financial and social gains.
The acquisition of Hilton Québec by Atenro is a powerful example of Reconciliation in action. It demonstrates how Indigenous communities can take leading roles in major economic sectors while preserving and celebrating their heritage. This historic partnership sets a precedent for future collaborations and demonstrates the importance of Indigenous leadership in shaping a sustainable and inclusive future in Quebec and across the country.
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BY SARA ANGHEL, PRESIDENT AND CEO, GREATER TORONTO HOTEL ASSOCIATION
As 2025 gets underway, the Greater Toronto Hotel Association (GTHA) is celebrating a remarkable milestone: our centennial year.
More than just an anniversary, it’s the culmination of one hundred years of city-building, economic development, and global connectivity with Toronto region hotels at the heart of the industry.
↓ Waterfront and Ontario Government Building, Canadian National Exhibition, Toronto, Canada. Circa 1925
When GTHA was established in 1925 as the Toronto Hotel Association, the city was still under prohibition, women had only sat on city council for a few short years, and the population hovered just around 550,000. That first decade saw the Toronto landscape start to blossom with some of its classic architectural gems, such as the Royal York Hotel, Omni King Edward Hotel, and Union Station. Residents witnessed a rapid transformation as Toronto streets bustled with automobile traffic and streetcars of the newly formed Toronto Transit Commission, while the suburbs expanded and downtown office towers sprouted taller, forming the iconic skyline we love today.
Over the past century, our association has supported its members as the accommodation sector expanded from a handful of small properties to a world-class network of member hotels catering to every need and budget. We have stood by our members as they welcomed millions of domestic and global travellers, sustained tens of thousands of careers, and earned over a quarter of the city’s annual visitor spending. We have advocated for the strength and prosperity of our industry as our membership has expanded alongside Toronto’s booming population and regional integration, bringing major events to the city and branding it as a global destination.
While our centennial year naturally invites us to reflect on the historic city-building that led us here, it also beckons us toward a promising future for the GTA hotel industry. Today, our Association represents over 150 hotels with 36,000 guest rooms and 32,000 employees. More than just a place to rest your head, these hotels are neighbourhood hubs, connectors of communities, and essential pillars of the Greater Toronto economy.
Our hotels welcome millions of visitors each year who in turn drive billions of dollars in economic activity and infuse life into Toronto’s unique neighbourhoods, cultural events, and culinary scene. The World Travel & Tourism Council’s latest findings indicate that for every dollar spent by travellers, over twice that amount flows back into the economy, touching sectors from retail to real estate. The industry is poised not just to maintain, but to enhance the city’s stature as we continue to welcome the world.
As we celebrate a century of success, GTHA looks forward to the next century, as we champion the city's vibrant spirit and build on the legacy that has made Toronto an enduring destination for travellers near and far.
Celebrating a century of success, GTHA’s mission is to support and advocate for the hotel industry, ensuring its continued growth and sustainability to foster growth and enhance the prosperity of the region.
GTHA.COM
Perched on the shores of Lake Massawippi in Quebec, Manoir Hovey stands as a testament to timeless elegance and historical charm. Originally built in 1900 as the summer mansion of Henry Atkinson, owner of Atlanta Power, the property’s design drew inspiration from George Washington’s Mount Vernon. Its expansive verandah and stately colonnades evoke a bygone era, while its latest addition, Le Spa, marries that heritage with contemporary luxury.
From the outset, we aimed to highlight the historical allusions of the exterior while using the interiors as a blank canvas for new guest experiences.
Designed by Toronto-based LAMAS Architecture, Le Spa at Manoir Hovey represents a thoughtful renovation and expansion, enhancing the retreat’s amenities while preserving its historical significance. Completed in 2023, the project exemplifies the balance between aesthetic reverence and modern functionality.
The spa was part of a larger renovation effort initiated just before the pandemic, which included updating the property’s swimming pool. According to LAMAS co-founder James Macgillivray, the goal was to integrate the spa into the natural hillside landscape while maintaining the architectural integrity of the original structures. “From the outset, we aimed to highlight the historical allusions of the exterior while using the interiors as a blank canvas for new guest experiences,” Macgillivray explains.
Approaching the spa from the lake, visitors are greeted by colonnades that echo the manor’s iconic features. The single-story portico, however, offers a contrast in its height and asymmetry, creating a dynamic interplay of forms. Inside, the vaulted ceilings and carefully framed views of the lake invite a sense of discovery, with guests descending to a lower level where the pool, hot tub, and spa facilities await.
Settled into a steeply graded site, the spa posed significant logistical challenges. Soil retention, drainage management, and the integration of mechanical systems demanded innovative engineering solutions. The steep terrain also influenced the design of the interior spaces, with windowless locker rooms offset by a skylight in the women’s change room that channels natural light through a lucarne on the roof.
On the lower level, floor-to-ceiling windows in the reception area, relaxation rooms, and sauna provide striking views of the lake and surrounding trees, further enhancing the connection to the natural setting. The design also incorporates a private outdoor terrace, adding to the spa’s luxurious offerings.
Maintaining the site’s historical elements was a key priority. This included temporarily removing two columns from the original building, along with a century-old Dutchman’s pipe vine, during construction. Both were carefully restored, and the vine has since regrown, ensuring the continuity of the manor’s iconic appearance.
Inside, LAMAS embraced a more contemporary aesthetic. The spa’s interiors incorporate abstract design elements inspired by the natural surroundings. The stone finishes of the hammam reflect the granite cliffs around the lake, while tree trunk motifs in the massage rooms and vibrant accent tiles in the locker rooms evoke the region’s autumnal foliage.
“The interiors gave us an opportunity to introduce clean, serene elements that contrast with the historical exterior,” Macgillivray says.
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The project also included the addition of new luxury suites, designed to maximize comfort and natural light. Each suite features a king bed oriented toward sweeping views, as well as spacious bathrooms with double vanities and private terraces.
By weaving historical details into a modern framework, LAMAS has created a cohesive experience that respects Manoir Hovey’s legacy while elevating it for today’s discerning guests. From the manor-inspired colonnades to the nature-infused interiors, Le Spa at Manoir Hovey encapsulates the property’s enduring appeal.
Client: Manoir Hovey
Completion date: 2023
Design Architect: LAMAS Architecture Ltd
Project Team: James Macgillivray, Vivian Lee, Marianno Martellacci, Kara Verbeek, Madeline Joo Sun Kim, Ron Noble
Executive Architect: Atelier Alan Bellavance
Interior Design: LAMAS Architecture Ltd.
Landscape Architect: SWDLA
Contractor: Construction Yves Lessard
Structural Engineer: Dugré Ingénieurs
Civil Engineer: FNX
Mechanical Engineer: CBTEC
Electrical Engineer: CJS Ingénierie
Spa Consultant: Emondo
