STAY Magazine ... Vol. 4, Issue 1

WINTER 2024

Q 1 2024: The FINANCE Issue AIs could soon run businesses—how might ‘artificial persons’ follow the law?

Inside the magic of Moroccan riads and dars

BIPOC hotel entrepreneurs are blazing trails, but recognition remains a challenge

The rise and fallout of short-term rentals

WINTER 2024 Volume 4 Issue 1 staymagazine.ca Publisher Big Picture New Media 45 St. Clair Avenue West, Suite 1001 Toronto, ON M4V 1K9 Editor-in-Chief Stacey Newman stacey@staymagazine.ca

Subscription Inquiries staymagazine.ca/subscribe

Editorial Advisory Board Robin McLuskie Managing Director, Hotels, Colliers Hotels

Visit us online staymagazine.ca Twitter @StayMagazineCA Instagram staymagazine.ca LinkedIn Stay Magazine

Brian Leon President, Choice Hotels Canada

© Copyright 2024 All rights reserved. No

Ed Khediguian Senior VP, CWB Franchise Finance

Director of Sponsorship & Advertising Mike Egan mike@staymagazine.ca

part of this magazine may be reproduced

Art Director Jayesh Bhagat jayesh-bhagat.com

STAY is published four times per year by Big

Contributors Jade Prévost-Manuel, Jim Byers, Jessica Gedge, Carter Hammett, Caeli Mazara, Daniel Gervais, Stacey Newman, Alnoor Gulamani, Ed Khediguian, John Nay, Anwar Sheluchin

without written permission of Big Picture Conferences/New Media, the publisher.

Brian Flood EVP and Practice Leader, Hospitality and Gaming, Cushman & Wakefield Scott Richer VP, Real Estate and Development (Canada), Hyatt Hotels Bill Stone President, Knightstone Hotel Group Gunjan Kahlon VP Franchise Sales and Development, Wyndham Hotels & Resorts

Picture New Media (BPNM), a subsidiary

Judy Sparkes-Giannou Co-Owner, Clayton Hospitality Inc.

of Big Picture Conferences. For 27 years,

Deborah Borotsik Senior VP, Beechwood Real Estate Advisors

Big Picture has been hosting the Canadian Hotel Investment Conference (CHIC) and other go-to conferences and events for

Alan Perlis President & CEO, Knightstone Capital Management and CEO, Knightstone Hotel Group

Canada’s hotel industry. Subscription price:

Alnoor Gulamani President, Bayview Hospitality Inc.

$110 per year, most single issues $18.95.

Christina Poon General Manager, Hotel W New York – Union Square

Big Picture Conferences

Phil Thompson Business Lawyer, Thompson Transaction Law

45 St. Clair Avenue West, Suite 1001

Sandra Kanegawa Owner, Heritage Inn Portfolio, X-Dream

Toronto, ON M4V 1K9

CONTENTS 3

EDITOR’S NOTE Canadian hotels are on the road to innovation station

31

Winter 2024 DOLLARS & SENSE Janak Bhawnani: The science of TrevPAR and the art of Canadian hospitality

4

REPRESENTATION MATTERS BIPOC hotel entrepreneurs are blazing trails, but recognition remains a challenge

35 AI + BUSINESS AIs could soon run businesses—how might ‘artificial persons’ follow the law?

11

INTELLIGENCE TO 2024 AND BEYOND… Hotel and travel trends around Q1, by the numbers

39 LENDING & FINANCING Q1 2024: Trends in Canadian hotel financing

16

INTERNATIONAL INSPIRATION Inside the magic of Moroccan riads and dars

21

CONSUMER TRENDS AMEX: Global projections for the hotel industry

On the Cover WINTER 2024

Q 1 2024: The FINANCE Issue AIs could soon run businesses—how might ‘artificial persons’ follow the law?

Inside the magic of Moroccan riads and dars

BIPOC hotel entrepreneurs are blazing trails, but recognition remains a challenge

The rise and fallout of short-term rentals

43 POLICY & THE LAW The rise and fallout of short-term rentals 49 CURRENCY OF THE FUTURE Canadians have serious trust issues when it comes to a central bank digital currency

24 HUMAN TRAFFICKING & THE HOSPITALITY INDUSTRY An ounce of prevention is worth a pound of cure, part three in our series

The Metcalfe Hotel Ottawa, Ont. Photographer: Justin Van Leeuwen Interior design: Iron & Ivory, and 4té

16

4 10

A P RIL 8- 9 , 2 0 2 4 The Westin Harbour Castle

#1 HOTEL INVESTMENT NETWORKING EVENT OF THE YEAR

Registration Opens Early February BECOME A SPONSOR

Contact Mike Egan mike@bigpictureconferences.ca 905.815.2722

hotelinvest.ca

SUBSCRIBE for free at staymagazine.ca

CANADIAN HOTELS ARE ON THE ROAD TO INNOVATION STATION WE FIND OURSELVES AT A PIVOTAL MOMENT in the history of the hospitality sector, pivotal

because the confluence of innovative technology and the ever-evolving economic landscape has presented us with novel problems and prospects that demand our keen attention.

As we navigate the first quarter of a brand new year, we present to you our 2024 Finance issue of STAY Magazine.

The hotel sector in Canada, much like the rest of the globe, is witnessing a transformation fuelled by technology. From contactless check-ins to the utilization of AI-powered chatbots for guest services, itinerary building and many other creative applications, our industry is embracing innovation like never before. These advancements not only enhance the guest experience but also streamline operations, making it essential for hotels of all sizes to embrace adaptation.

The economic landscape of both Canada and the world is undergoing significant shifts. As we grapple with the aftermath of global events, we see changes in travel patterns, consumer behaviour, and economic policies that directly impact our sector. In this issue, we discuss these topics and hope to prompt our readers to make informed decisions that ensure the sustainability and growth of our businesses.

In this issue, we offer stories about the unique barriers faced by BIPOC hoteliers, we look at consumer travel trends, and we talk about TrevPAR as an underutilized metric. We explore case studies involving AI as artificial persons in the eyes of the law, as well as Canadian hotel intelligence based on the latest statistical analyses. Our commitment to journalistic ethics means that we will provide accurate, well-researched information from reliable sources to ensure that you have the most up-to-date and trustworthy information at your disposal.

We encourage you to actively engage with STAY content, challenge assumptions, and seek opportunities to harness innovation while navigating the ever-evolving economic landscape. We hope that STAY Magazine serves as a valuable resource for industry professionals, researchers, and stakeholders alike.

Thank you for joining us on this journey, and we look forward to being your trusted source for insights and analysis in the Canadian hotel industry throughout 2024 and beyond.

Stacey Newman Editor-in-Chief Winter 2024 |

staymagazine.ca

|

3

Representation Matters

BIPOC HOTEL ENTREPRENEURS ARE BLAZING TRAILS, BUT RECOGNITION REMAINS A CHALLENGE Living in a post-pandemic world, BIPOC accommodation owners are feeling the hum of tourists less afraid to travel these days. But it’s also an uphill battle to be recognized.

By Carter Hammett

According to a 2021 joint report undertaken by Restaurants Canada and the Hotel Association of Canada, 29 per cent of the hotel industry’s workforce is composed of visible minorities. That number is higher south of the border at 51.8 per cent. But upon closer inspection minority representation drops significantly at the C-suite and VP levels and diminishes even further at the board of director level. Unfortunately, similar Canadian statistics remain unavailable; what is documented tends to focus more narrowly on women and Black representation.

There’s no question that events like the death of George Floyd on May 25, 2020, while in police custody and the subsequent rise of the Black Lives Matter movement have raised our collective consciousness about systemic racism. The response from many in the hospitality industry has demonstrated signs of progress, whether through the creation of employment resource groups and/or the establishment of inclusion committees.

But another group of BIPOC hoteliers and business people has chosen to go its own way, walking its own path, upholding its own truth; people like Peter Lee, vice president of development with Wyndham Hotels and Resorts Canada. Lee is based in Vancouver and he is one of Canada’s longstanding hotel sector 4

|

staymagazine.ca

|

Winter 2024

executives, a voice of knowledge, reason and the immigrant experience in our Canadian industry.

Lee’s career in hospitality began in 1976. After coming to Canada, he first got a job as a delivery person, then about 10 years of food and beverage before he became a night auditor during Expo ‘86. Lee says he wholly embraced his career in the hotel industry and he still does.

“I think the best part of my job is meeting people that want to have the opportunity to grow and profit. I've seen that. I've probably done a couple hundred deals in franchising through my life, and I've seen all walks of life come in the door and how they can succeed. Diversity makes our industry stronger by unlocking new perspectives and providing access to new communities that we may not otherwise interact with on our own. That’s the value BIPOC owners add not only in Canada but more broadly to our industry,” says Lee. “From my experience, BIPOC owners bring an amazing sense of pride to the work that they do. They go all in, and they incorporate much of their cultural identity into their day-to-day work. Whether it’s their first hotel or one of several that they own, hotel ownership helps unlock multi-generational wealth, and there’s a sense of pride with BIPOC owners when it comes to making a lasting legacy for their families and communities.”

The Ode. Photo by Curtiss Randolph.

T

here has been a growing number of conversations happening in the hospitality industry about diversity and inclusion in recent years.

Representation Matters

Manitoulin Hotel and Conference Centre

Manitoulin Hotel and Conference Centre

Hospitality and First Peoples

Aboriginal themes. And while many folks from Southern Ontario visit the centre during its busy summer season, the hotel has also gained a niche for itself by hosting bus tours.

A sense of pride is certainly reflected in the gorgeous interior design of the First Nations-owned and operated Manitoulin Hotel and Conference Centre (MHCC), which celebrated its tenth year of operation in 2023.

First Nations people feel a deeply-rooted sense of ownership in their hotel, says general manager Corey Stacinski. “This hotel is considered a badge of honour and people look for that authentic component and an immersive experience,” he says.

“Those bus tours froze for a while during Covid, when attendance dropped to zero,” Stacinski says, “And staff dropped from 79 to nine people. The hotel went through a lean period but gradually tourists have returned and attendance is back to preCovid levels.”

Offering 58 rooms, a 5,600 sq. ft. conference room and an adjoining restaurant, the MHCC hosts motor coach and bus tours, business meetings, weddings and virtually any type of activity, including a film festival.

Six years before opening in 2013, a former Indigenous tour company, Great Spirit Circle Trail (GSCT), hit upon the idea that having first-rate accommodations right on the island would encourage tourists to linger longer, says Stacinski. “Prior to that, we were sending visitors to Sudbury.”

With a unique idea for shared ownership, GSCT invited local First Nation communities to consider a joint venture. The project saw six communities buy into the idea: Aundeck Omni Kaning, Sagamok Anishnawbek, Whitefish River, Sheshegwaning, M’Chigeeng and Wiikwemkoong. Along with funding contributed

by Aboriginal Business Canada, Aboriginal Affairs and Northern Development Canada and the Northern Ontario Heritage Fund Corporation, each partner contributed to the $12.5-million price tag.

The final product hums with Indigenous culture, including a breathtaking tipi-shaped lobby and outdoor excursions with Peter Lee, vice president of development with Wyndham Hotels and Resorts Canada

6

|

staymagazine.ca

|

Winter 2024

Representation Matters

Manitoulin Hotel and Conference Centre

The Ode. Photo by Curtiss Randolph.

Travelling while Black

travellers to older travellers coming to the neighbourhood to visit their kids. Guests are putting more and more emphasis on staying in special neighbourhoods and spaces. No beige carpets, no generic landscape art, no neighbourhoods devoid of personality,” she says.

Covid proved to be no barrier for one ambitious family that decided to open their business in 2021, during the very height of the pandemic. Tiffany Ramsubick-Plange and her family launched the boutique hotel Ode Toronto, in one of the city’s trendier neighbourhoods—Dundas West.

They haven’t looked back.

“I have three siblings, and we all have serious day jobs, a lawyer, doctor, engineer and coder. But we also have a super creative side and wanted to have an outlet for that. We are all also deeply obsessed with Little Portugal where Ode is located and so we decided to create Ode to bring people who might not otherwise know about this amazing community,” she says. “In terms of the experience, we want guests who stay at Ode to feel like they are staying with their cool and deeply thoughtful family member. We really subscribe to the ‘unreasonable hospitality’ model. If you have a request, we will do everything we can to accommodate.

And we also encourage guests to leave Ode. Our only common area is our rooftop deck, and we do not have room service or a restaurant. We encourage guests to go out and explore the neighbourhood, which has some of the best restaurants, shops and galleries—all within walking distance.”

Location aside, Ode fulfills the goal of not only being a funky place to crash for the night but also appears to have become something of a safe space for visitors.

“Black travellers are a powerful and influential sector and we are looking for places to stay where we can feel safe, valued and appreciated. We see so many Black guests who are thankful to have found a place where they know they will be welcomed and won't have to deal with any ‘travelling while Black’ scenarios.

It's truly been one of the most rewarding parts of opening Ode, being able to create that safe space for our community.”

Ramsubick-Plange feels that Ode stands out from its competition for many reasons, including location.

“We made Ode for people who are looking for interesting neighbourhoods to stay in, who care about design, and art, and supporting local businesses. We thought our clientele would mostly be in the 30-45 age range with a penchant for supporting the arts. But it just so happens that a lot of people actually care about the above things, so we have everyone from business The Ramsubick family. Photo by Curtiss Randolph.

Winter 2024 |

staymagazine.ca

|

7

Representation Matters The path ahead “Hotel ownership is challenging and every owner has a unique path,” says Wyndham’s Peter Lee. “As the world’s largest hotel franchisor with decades of experience across team members and leadership, it’s our job to meet owners where they are— whether it’s facing rising interest rates and high construction costs today or weaving in best practices when it comes to dayto-day operations. We’ve seen it all at Wyndham, and we can leverage our expertise to tackle those challenges alongside our franchisees and find solutions that help them succeed.”

Some entrepreneurs respond well to guidance and structure offered by a franchisor like Wyndham and programs like the recently introduced IHG LIFT, a program offered by IHG Hotels and Resorts, which aims to open doors to hotel ownership for under-represented communities. Others, like Ode, simply aren’t afraid of taking chances.

“For Ode, the sky is the limit. We would love to expand to different cities,” says Ramsubick-Plange. “My dream would be to open up on Trinidad & Tobago where my parents are from. My mom and I also always talk about having a podcast, because we deal with some crazy stuff running this business, maybe even a Netflix show. For the hotel industry, thankfully I feel like travel is over-correcting post-Covid. People were cooped up and are ready to get out of their houses and away from the day-to-day grind, so I see the travel industry booming again in the future.

Fingers crossed.”

“Hospitality is one of the most diverse industries with employees, owners and team members from many different backgrounds,” says Lee. “It’s important for companies to embrace and celebrate those cultural differences—because they represent our guests, too. At Wyndham, inclusivity is one of our core values and it inspires us to make hospitality a more welcoming industry every day. The more we know, the more we understand, and the better experiences we can provide.”

8

|

staymagazine.ca

|

Winter 2024

Representation Matters

BIPOC in Canada, resources + links INDIGENOUS TOURISM ASSOCIATION OF CANADA:

indigenoustourism.ca ODE HOTEL:

odetoronto.ca BLACK BUSINESS DIRECT:

blackbusinessdirect.ca CANADIAN ASIAN HOSPITALITY INDUSTRY ASSOCIATION:

cahia.org/contact

MANITOULIN HOTEL AND CONFERENCE CENTRE:

manitoulinhotel.com

JUBILEE HOSPITALITY ASSOCIATION CANADA:

jhacanada.com

BIPOC FOUNDATION:

bipocfoundation.org STARTUP CANADA:

Carter Hammett is a Toronto-based writer, editor and social worker. His work has appeared in Auto and Trucking Atlantic, The Toronto Sun and Convenience and Carwash Canada among others.

startupcan.ca/ top-12-resourcesfor-black-entrepreneurs-in-canada

Winter 2024 |

staymagazine.ca

|

9

Intelligence

2024

TO AND BEYOND… Hotel and travel trends around Q1, by the numbers

By Jim Byers

SEVERAL MAJOR BRANDS AND TRAVEL COMPANIES have issued forecasts for 2024, and it’s mostly

good news for the Canadian hotel industry.

Canadian travellers are looking for better sleep on the road and are more willing to use artificial intelligence to plan their trips. We’re also likely to see rising room rates in Canada, a continued slow recovery for business travel and more off-season travel.

Here are some of the predictions and trends singled out by Hilton, Hotel Planner, Expedia and other travel companies.

HILTON: TRENDS INCLUDE SLEEP AND FRICTIONLESS TRAVEL A late 2023 survey of more than 10,000 travellers from around the world found that hotel guests next year will be looking for better sleep, more culinary and cultural options, and more connectivity.

A Hilton/Ipsos study also found that travel shows no signs of slowing down. Nearly two-thirds (64 per cent) of global travellers say they aim to reduce other areas of their personal spending to prioritize leisure travel in 2024.

In 2024, travellers will look to engage with products and brands aligned with getting a good night’s rest, Hilton officials said. Gen Z’ers are the most intentional about winding down, making small choices throughout the day that can make a big impact on their sleep, such as regulating their workout routine and avoiding alcohol before bedtime.

The Dorian, Calgary, Alta.

Kevin Morgan, global brand head, Tempo by Hilton, said Tempo hotels have created specific zones; a “get ready for your day” zone where a guest can exercise, finish some work or practice yoga, a bathroom with an oversized shower and a mirror with a Bluetooth speaker so a guest can listen to a podcast, and a “power down zone” with a Sealy mattress that’s exclusive to Hilton.

Amanda Al-Masri, vice president of wellness, Hilton Hotels, said there’s a Peloton bike in every hotel in the United States and many in Germany, the UK and Canada, allowing guests to take their exercise routines on the road.

Winter 2024 |

staymagazine.ca

|

11

Intelligence

Eighty per cent of global travellers surveyed said it’s important to be able to book their trip entirely online, with 86 per cent of Millennials and 83 per cent of Gen Z’ers leading the charge.

Dan Morton, vice president of guest experience, Hilton Hotels, said 76 per cent of global travellers appreciate an app that reduces stress and friction in their travel journey.

Culture and experiences, plus business travel Dining, culture and connections are inspiring leisure travel decisions as people increasingly prioritize the purchase of experiences over things, Hilton’s study suggests. As they budget for 2024, travellers’ top focus is on culinary experiences. Second to culinary experiences, 47 per cent of travellers will prioritize exploration and adventure, with Gen Z’ers and Millennials (52 per cent for both) carving out more budget for these types of experiences than the other generations.

Ways of work have transformed significantly following the pandemic, including shifts in when, where and how people conduct business. As a result, business trends have emerged and strengthened, including blended leisure and business travel, increased length of stays and the rising popularity of secondary markets for meetings and events.

12

|

staymagazine.ca

|

Winter 2024

Forty six per cent of global full-time and self-employed workers plan to travel for business or bleisure, while 24 per cent of business travellers plan to take a friend or family member with them on a business trip next year. More than a third of Gen Z and Millennial business travellers said they plan to extend a business trip in 2024 to enjoy leisure time before or after their work obligations.

Jess Petit, senior vice president of commercial strategy, insights and analytics, said programs like Hilton’s Project H3, which provide apartmentstyle accommodations for guests who might stay up to three weeks or more, are growing quickly.

“We’re trying to build products that really suit the needs of all of our guests, but we’re seeing so many customers that are looking for that long-term stay, and having a travel experience that really matches that.”

Gerilyn Horan, VP group sales and strategic accounts, said 85 per cent of the business travel Hilton sees in its hotels is from small and medium-sized companies.

AMERICAN EXPRESS: OCCUPANCY AND RATES After three rollercoaster years, hotel rates will continue to rise in most locations globally during 2024, according to a report

by American Express Global Business Travel (Amex GBT).

The Hotel Monitor 2024 report found

that most cities around the world should experience rate increases in line with local inflation, following the large price jumps in 2022 and 2023 fueled by a surge of so-called “revenge tourism” which helped inflate rates.

According to the report, Canada’s hotel industry achieved record-breaking average daily rate (ADR) and revenue per available room (RevPAR) levels in 2023.

Vancouver saw the country’s highest occupancy, at 89 per cent.

Across the country, rates are expected to rise by about 7.8 per cent. The Amex study predicts hotel rates will rise 8.9 per cent in Vancouver, 8.3 per cent in Montreal and 6.7 per cent in Toronto in 2024, more than a point below the national average.

While global inflation is set to fall in 2024, the report said rising costs will continue to impact hotel bottom lines. A key factor is staffing, as Amex said hotel wages in North America are at record levels.

“Traditionally, low occupancy acted as a trigger for hotels to lower rates,” the report reads. “Today, hotels are happy with lower occupancy so long as they can raise their rates. This is especially the case in destinations where hotels cannot deploy their full inventory because of staff shortages.”

(Read more insights from Hotel Monitor 2024 report

by American Express GBT on page 21.)

Intelligence

EXPEDIA: THE RISE OF SPORTS TRAVEL A late 2023 report from Expedia, Hotels. com and Vrbo found that almost half (42 per cent) of Canadian sports fans were more likely to travel and see a game on the road rather than attending a game at home or in their closest sports city.

The Sports Travel Road Game Report also found that the average fan takes approximately three sports trips per year, and that 80 per cent of fans are looking to take either the same or more trips in the upcoming year than they did the previous year.

Fans prioritized sports travel over dining at restaurants and going to concerts and reported spending on average $4,294 per year on sports trips (including travel, accommodation, tickets and food). For football fans, the cost per trip was said to be approximately $500 higher than the average fan trip, while hockey fans estimate an average spend of $1,291 per trip.

Not surprisingly, the top cities for sports travel in Canada are Toronto, Montreal and Vancouver.

Music and television/movie travel In 2023, the cultural impact of the Taylor Swift Eras and Beyonce’s Renaissance tours was undeniable, driving ticket sales but also travel and tourism. Expedia predicts that Tour Tourism will continue

to thrive in 2024. Nearly 70 per cent of survey respondents say they are more likely to travel to a concert outside their own town, with more than 40 per cent saying they'd travel for a concert as an excuse to visit a new place. Unexpected cities on Expedia's list of top tour tourism destinations are Kuala Lumpur, Edmonton, and Mexico City.

Expedia also says travellers are increasingly looking for great vibes when they book a hotel. Beyond searching for specific amenities or star ratings, a hotel's overall vibe is becoming a strong indicator of travellers' hotel choices. Guest reviews mentioning the word "vibe" have increased an average of 1,090 per cent year-over-year, and 9 out of 10 travellers say the vibe of a hotel is important when booking.

Travellers are seeking a variety of vibes when searching for hotels from "Modern Vibe" and "Industrial Vibe" to "Retro Vibe" or "Margaritaville Vibe," Expedia said.

"What contributes to a hotel's overall vibe? Travellers say the top element is customer service, which surpassed the music, interior or lighting of the hotel."

HOTEL PLANNER: NO MORE SHOULDER SEASON AND THE CHINA MARKET In an interview with STAY, Philip Ballard, chief communications officer & head of investor relations at Hotel Planner, said he’s noticed a blurring of the seasons,

to the point where shoulder season may become a thing of the past.

“People are waiting until September or October or even November to visit Banff or Halifax. You can save a lot of money, ensure rooms are available, and there are no crowds.

“Business people are continuing to add time at the start or end of their trip so they can explore a destination with their family,” Ballard said.

There also has been a “massive” rise in digital nomads.

“They can work anywhere in the world and go city to city, week after week or month to month.”

Ballard said at least 15 countries have digital nomad visas, perhaps even 20.

Revenge travel eases Revenge travel was a big trend in 2022 and 2023, with tons of North Americans flying off to Europe and other destinations they could only dream about during the pandemic. Ballard said 2024 will be a robust year but that demand will be down slightly.

He also believes many people have spent their COVID savings and are worried about inflation. If that’s true for Canada, it could mean more Canadian travellers will stay closer to home this year.

Winter 2024 |

staymagazine.ca

|

13

Intelligence

Philip Ballard

Canadians also are booking further in advance and thinking more strategically.

That doesn’t mean they don’t book last minute, but they’re more comfortable planning ahead right now.

Conferences are roaring back, but Ballard said business travel won’t be fully back until maybe 2024/2025.

“A lot of companies are cutting their budgets, and the first things that get cut are marketing and corporate travel.”

China Slow to Recover Ballard also said the Chinese market has been slow to return to pre-pandemic levels, which is not great news for British Columbia and other destinations that rely on strong bookings from China.

“We haven’t seen the massive influx of Chinese inbound travel to North America yet. I think it will be another year until China gets back to normal. But India is now on the map. It just surpassed China in population, and a lot of Indians are travelling.”

That might not be a big help to Canadian hotels given the current Canada-India political dispute, but it’s a long-term trend worth watching.

Ballard said one trend he’s noticing is that ski resorts in North America are adding more spring, summer and fall activities, such as triathlons and bike races, as well 14

|

staymagazine.ca

|

Winter 2024

Gerilyn Horan

as art and music programs, to boost their bookings. “They have great space that’s often underutilized when there’s no snow on the ground.”

Lastly, one big trend for 2024 is the solar eclipse that will take place next spring. Hotels and cities in Ontario, Newfoundland and other parts of Canada are announcing viewing parties, and hotel rates are already on the rise for the eclipse date, which is Monday, April 8, 2024.

BOOKING.COM: CLIMATE CHANGE AND AI TRENDS A report by booking.com late in 2023 said Canadian travellers are increasingly looking for cooler vacation spots to battle climate change. They also increasingly trust artificial intelligence to help make their holiday choices.

The study found that 33 per cent of Canadian travellers would trust AI to plan a trip for them. As well, almost half (44 per cent) of Canadian travellers will want insights and tips from AI when on vacation to upgrade experiences with suggested ancillaries and deals.

With climate change such a major topic last summer and heat all over Europe, 40 per cent of Canadians said climate change will impact the way they plan their vacation in 2024. Three quarters (76 per cent) agreed that being close to water instantly makes them feel more relaxed, with more than four-in-ten (43 per cent)

Kevin Morgan

interested in water-centric vacations in 2024.

Maybe the strangest part of the study to me is that 28 per cent of Canadians say they make up stories about their real life when they meet people on vacation.

Exaggerate, I can see. But making things up? Really? Who does that? “Oh, yes, I’m actually a marine biologist. I consulted on the George Costanza/whale episode on Seinfeld.”

Averse to the ‘sameness’ of everyday life and actively avoiding cookie-cutter experiences, the intuitively adventurous traveller of 2024 wants to step outside of the homogenized vacation, with 48 per cent preferring to venture off the beaten path and a quarter (26 per cent) seeking to travel with strangers. The majority (58 per cent) would like to have no plans set in stone prior to travelling in 2024 so they can go where the wind takes them, while over two thirds (65 per cent) prefer to travel with loose plans so they can change direction based on what feels good in the moment.

The travel industry is already responding fast with tech-enabled flexible services, giving travellers the option to cancel, change plans, and buy now, pay later at the press of a button. The explosion of AI, which has already seen the launch of Booking.com’s AI Trip planner, is going mainstream in 2024: 33 per cent of Canadian travellers would trust AI to plan a trip for them, with a third of baby

Intelligence boomers (30 per cent) and one in five (20 per cent) of the silent generation finally surrendering to AI in order to assist their travel plans in the year ahead.

Like Hilton, booking.com also reports that Canadians want to sleep better on holiday.

Forty six per cent of respondents said they want to travel in 2024 solely to focus on uninterrupted shut-eye.

For those who are used to sleeping solo, over a quarter (29 per cent) of Canadian travellers would carve out time for a matchmaking holiday to find a spark with a new partner or lover, while 25 per cent would focus on a heartbreak holiday to get over an ex. On the contrary, for those still rocking their relationships, 23 per cent want to deepen that human connection with their partner as their main priority

Coast Capri Hotel - Kelowna, BC

for travelling in 2024. On the flip side, for those increasingly frazzled parents, they are surprisingly seeking solace on completely solo holidays, with almost half (43 per cent) planning to travel alone in 2024, dropping the kids and their partners to prioritize their vitality.

Taking the impetus to reinvent their ‘real’ life, 41 per cent revealed that the strippedback lifestyle of agrarian and Indigenous communities, where self-sufficiency is a way of life, would appeal to them in 2024. Beyond just back to basics, the focus is on a better balance with nature and the elements to reset their day-to-day back home.

One-half of Canadians (48 per cent) plan to pick destinations in 2024 where the cost of living is less expensive than

their hometown, while travelling closer to home is also a draw for some who will be searching for luxe-for-less copycat vacations to reduce costs in 2024 (34 per cent). Many (35 per cent) Canadian travellers will be willing to pay for day passes to use the amenities in a five star hotel rather than actually staying there, with a similar number of parents (36 per cent) planning to take their children out of school to travel outside of peak season to make their money stretch further in 2024.

Their study also found that 40 per cent of Canadians are looking for accommodation that has wow-factor sustainability innovation. Half (50 per cent) want to see sustainability in action, while 56 per cent want to see the outside brought indoors with green spaces and plants in accommodations on vacation.

Coast Canmore Hotel & Conference Centre - Canmore, AB

join our network of unique hotels retain your local identity & individuality while harnessing the power of coast hotels

Coast Hotels delights guests with friendly service and refreshingly localTM stays through our network of unique hotels in North America. We have over 50 years of experience and a suite of services that drive revenue and grant a competitive return on investment. Let us show you how we do it.

let's talk! mark hope I senior vice president, development m.hope@coasthotels.com I t.604.642.4104 I coasthotels.com

Coast Bastion Hotel - Nanaimo, BC

International Inspiration

INSIDE THE MAGIC OF

MOROCCAN RIADS AND DARS

By Jade Prévost-Manuel

Morocco’s luxury traditional houses-turned-hotels give us something we can’t find at home. And isn’t that what hospitality is really about?

LIKE ALL RIADS AND DARS IN MOROCCO, IT’S HARD TO KNOW EXACTLY WHAT LIES BEHIND THE SIMPLE EXTERIOR OF RIAD DAR EL KEBIRA—an old keyhole hardwood door with

a large knocker, guarded by a robust Siamese street cat who looks like he could teach you a thing or two in a fight. Located in the heart of the Moroccan capital Rabat’s maze-like old medina, or walled city, it’s taken a while for me to find.

Yet behind this humble entryway is a palatial residence fit for a sultan. It’s the kind of space that teases the senses—there’s the aroma of dried lavender steeping into the space, which the cleaning staff uses to perfume the rooms. The visual treat of the two-story enclosed courtyard, furnished with delicate ArabAndalusian, Turkish, and Ottoman furniture upon which its ornate chandeliers cast a warm glow. The feeling of the steam rising from a glass of mint tea, the country’s proprietary welcome drink that blends mint, black tea, and heaps of sugar, carefully arranged on a silver platter in the foyer. It’s high summer, but the hot tea is paradoxically refreshing, a warm treat accompanied by Moroccan shortbread cookies, or sables, of all shapes and sizes.

“Soyez bienvenue, madame,” Safouane Abouya, general manager at Riad Dar El Kebira tells me as I bite into an almond cookie. “You are welcome in Morocco.”

The riad—a traditional courtyard house that has been transformed into a hotel—has some of the most elaborate décor I’ve ever seen in a guest accommodation. Ironically, I’m told it’s rather modest, compared to some of the riads out there. Dar in Arabic means “house”, while riad means “garden”. Together, these words describe the traditional homes that have been around in Morocco for close to 1,000 years, and that today, are in high demand among travellers to the North African tourism mecca. Historically, riads were places where entire families would live—parents, plus their children once they were married, and even extended family members.

16

|

staymagazine.ca

|

Winter 2024

International Inspiration

Some riads have been around almost that long—what’s widely regarded as the earliest example was the former Marrakesh palace of one of Morocco’s famous early rulers, built in the early 1100s. It’s not uncommon today to find a riad that’s hundreds of years old—Riad Dar El Kebira is over 500, relatively young to be situated in Rabat’s old medina, which dates to the 12th century.

The homes are known for their opulence—grand entrances, towering doorways, and immaculate inward-facing gardens and patios that create the illusion of a wealthy sultan’s palace and a villa in fair Verona, all at once.

Five years into running the operations behind this elaborate property, Abouya feels at home here. It’s a big change from the large hotels he worked at before, but a welcome one.

“It’s not the same. In the hotels, we’re always signing papers, making reports,” he says. “In the riads, we have time to say hi, to talk to people.”

Such is the experience that travellers from around the world come to Morocco’s riads to find. They offer Canadian travellers a taste of the lavish and luxurious, for a fraction of what they might pay for a luxury stay back home: sprawling continental breakfasts of pastries, omelettes, and fresh Moroccan olives, bathrooms with clawfoot tubs and luxury soaps, and impeccable service throughout the day.

Riad Dar El Kebira, from what I gather during my stay, has all this and more. Its charm is that what it offers is something that simply cannot be replicated outside of Morocco—a stay that is authentically Moroccan, from the food it prepares to the exquisite handicrafts with which it furnishes the rooms, each named after the city’s quarters.

18

|

staymagazine.ca

|

Winter 2024

Industry forecasts suggest that stays like this are what leisure and business travellers are coming to expect. Hilton’s third annual trends report, released in October, has forecasted that culture will remain a major priority for hotel goers in 2024. This is particularly true for culinary experiences—cue the steaming tajines and Friday couscous that Riad Dar El Kebira prepares in-house. The report also found that, globally, 46 per cent of full-time and self-employed workers plan to travel for bleisure in the coming year.

“Traditional accommodation really gives you a sense of place, a sense of where you are in the world,” says Nicole Mathias, a Niagara travel agent who plans trips around the world for couples and families. “If you’re in a traditional, North Americanstyle hotel room, you could be anywhere.”

The folks Mathias works with, she says, look for places that are locally run, beautiful, and comfortable—a unique experience, but with creature comforts. So too do the business travellers who comprise most of Riad Dar El Kebira’s visitors, Abouya tells me as we weave up an immaculate staircase with polished railings made from wooden canes. Most of them work for large conglomerates like IBM, Microsoft, and French telecommunications giant Orange. In between meetings, they want to experience the culture, from the medina through to their accommodations.

“People who visit Morocco, they want to see the old parts of the city,” says Abouya. “They don’t want to see the big buildings of the new town. They want to discover real life here.”

While each riad is unique in its architecture, service, and interior design, there are similarities among them that standardize the riad experience. The balconies and galleries face inwards, not outwards, onto an interior courtyard. Walled

International Inspiration

in by a two-or-more-story building, the courtyard typically boasts a garden, pool, or decorated lounging space. Of course, for all their antiquity, riads have evolved to keep up with the times. High-speed Wi-Fi, an in-suite TV, and an air conditioning unit are the traces of modernity that betray the age of my superior suite at Riad Dar El Kebira.

It is this combination of traditional architecture and design, and modern comforts from home that makes Moroccan riads so alluring to travellers visiting the North African country.

In recent years, there has been a renewed interest in riads.

Many of these historic structures fell into disrepair over the years, but a wave of restoration efforts has revitalized them.

Today, many have been transformed into boutique hotels, offering travellers a chance to experience the charm of traditional Moroccan living.

Dar El Kebira’s own transformation took place about 10 years ago when the previous owner sold the house to a Moroccan family from Rabat. It was retiled, expanded, and combined with the adjacent property, which the family also bought, to turn it into a fully functioning boutique hotel.

It is perhaps the North American tendency to favour the predictable—ready-to-assemble furniture we can re-order at a moment’s notice, monochromatic bed sheets and curtains that match any colour palette—that separates us from the bold patterns, colours, and quirks of a traditional Moroccan riad. It smells unbelievably good here, not because of a Glade plugin, but because of the dried herbs steeping their aroma into the suite. Even the toilet bowl’s rim is painted with an Andalusian pattern.

in the summer heat, takes a good few pulls to close shut; the low arch, a forehead clunker for anyone over 5’7” that opens up to the bathroom; the light drip brought on by the heavy overnight rain.

There are differences in supply, of course, that make it easier to go with a maximalist design look here. Riad Dar El Kebira’s hand-woven rugs, silver teapots and platters, and polished wooden armoire come a lot cheaper in Morocco, where the cost of goods and services is far lower than in Canada. So is the source of the country’s handicrafts—Fes, a city just a few hours from Rabat.

Yet a stay at a Moroccan riad is perhaps a lesson for Canadian boutique hotels and hospitality businesses looking to differentiate themselves from the competition. It’s the quirks and the careful details, the commitment to authenticity, and the weaving in of creature comforts that turn a guest stay from mediocre to magical—authenticity, down to the experience of finding the riad again after leaving to explore the medina.

I wander down several cobbled alleyways, passing stores that sell brass teapots and copper lanterns on my hunt for the riad’s entrance. Later, a laundromat. After several tries, I locate Riad Dar El Kebira’s heavy hardwood door, the small sign that swings from a jutting metal bar above it. Abouya laughs—the chase is part of the experience.

“Sometimes it’s better to get lost inside the narrow streets than to find your way by yourself,” says Abouya. “Of course, we have porters who can come and meet guests, help them home. But this is good.”

It’s the careful thought-outness of the room that makes it easy to overlook the hardwood, stained glass door that, swollen Winter 2024 |

staymagazine.ca

|

19

Consumer Trends

Consumer Trends

AMEX:

GLOBAL PROJECTIONS FOR THE HOTEL INDUSTRY According to the Hotel Monitor 2024 report by the American Express Global Business Travel consulting team, prices are likely to continue to rise in the year ahead.

By Jessica Gedge

AMEX HAS RELEASED HOTEL MONITOR 2024, a report that forecasts hotel rate

movement in more than 80 cities to determine if the hotel sector will stabilize in 2024. The American Express Global Business Travel (AMEX GBT) consulting team used Prophet time series modelling to generate the hotel rate forecasts for the report. The data for the analysis was derived from Amex GBT’s data lake and International Monetary Fund (IMF) inflation forecasts were used in their predictive model. Prices are in local currency.

Hotel prices set to increase worldwide Global inflation should fall in 2024 but it will continue to impact hotel cost models. Staffing is a key factor, with hotel wages (in the US, for example) at record levels. Rate rises can be expected to closely mirror inflation and will depend on the available supply and other local factors (trade shows, conventions, sports events, or the tourist season) which can impact price and availability.

Low occupancy has traditionally been a reason for hotels to lower rates but that’s no longer the case. Hotels are now fine with lower occupancy as long as they can raise their rates, especially the case in destinations where hotels have staff shortages.

The wave of “revenge tourism” which inflated rates in 2022 and 2023 seems to be losing its momentum; STR believes leisure demand is now normalizing, and that leisure travel is less likely to impact prices.

Negotiations for travel programs After accepting large rate increases in the 2023 sourcing season, corporates will be looking for better deals in 2024. Travel buyers have an opportunity to look at their hotel Winter 2024 |

staymagazine.ca

|

21

Consumer Trends

program and make sure it’s meeting their needs in ways such as focused rate negotiations on the key hotels in the program and taking advantage of the travel management company’s preferred rates.

With prices still rising and supply constrained, many corporates will prefer to concentrate on key cities and negotiate static rates there.

New ways of selling are also being reported, including examples of hotels shifting to attribute-based selling in direct channels, giving customers multiple options they can use to personalize their guest experience.

Staying up to date with traveller behaviour Safety is top of mind for travellers. There is a growing volume of client questions about guest safety as part of the Request for Proposal process. Buyers want to know what security measures are in place to protect guests.

Remote and hybrid working is the new norm and is impacting corporate travel. A majority of travellers surveyed by Skift leveraged workplace flexibility to take shorter trips and/or travelled for an extended time. This blending of leisure and corporate travel has led to a noticeable increase in weekend travel. Companies are also reporting that guests are requesting high-speed internet for conference calls and late departures to allow them to attend meetings.

Hybrid working is also increasing the demand for extended-stay hotels. In response, global hotel chains including Marriott, Hilton, Hyatt, and Wyndham have expanded their extendedstay offerings.

Sustainability commitments Green-washing won’t cut it. Travel buyers expect hotels to provide detailed information about their sustainability offering – from carbon emissions, wastewater, and guest room recycling to food miles, employment policies, and energy suppliers.

22

|

staymagazine.ca

|

Winter 2024

Highlights by region: North America has experienced significant rate increases as hotels that are already having to manage high inflation and skills shortages experienced a wave of leisure-driven demand. Despite a slowing economy, 2024 is expected to bring further rate increases, particularly in major convention destinations.

Canada’s hotel industry achieved record-breaking average daily rate (ADR) and revenue per available room (RevPAR) levels in 2023. Vancouver had Canada’s highest occupancy rate, at 89 per cent.

Amex GBT’s Hotel Monitor 2024 forecasts hotel price trends in major cities based on analysis of millions of hotel transactions and IMF economic data. Some predictions for ADR changes for top business travel destinations in North America include: • • • • • • • • • • • • •

Vancouver +8.9% Montreal +8.3% Toronto +6.7% Chicago +12.6% Boston +11.3% San Jose +10.2% Portland +9.5% Dallas +8.2% Atlanta +7.5% Newark +7.2% New York +6.8% San Francisco +6.2% Charlotte +4.6%

New hotel construction projects across Canada were announced in 2023 which will increase supply.

According to Lodging Economics, in the first half of 2023, 12 new hotels/1,637 rooms opened in Canada with an additional 16 new hotels/1,808 rooms scheduled to open before year-end, for a 1.0 per cent growth rate. 2024 is forecast to see 33 new

Consumer Trends

hotels/3,951 rooms open and 2025 will have 43 new hotels/4,537 rooms open, for a 1.1 per cent and 1.2 per cent growth rate, respectively. The top hotel companies in Canada’s construction pipeline are Marriott International (Marriott), leading with 75 projects/10,059 rooms, followed by Hilton Worldwide (Hilton) with 66 projects/8,119 rooms, and IHG Hotels & Resorts (IHG) with 39 projects/4,014 rooms.

United States Inflation is slowing in the United States, but it's expected that hotels will continue to increase their prices due to the growth in occupancy throughout the country in 2024.

Key convention cities such as Chicago and Dallas are likely to experience a surge in demand due to the return of major trade shows. As leisure demand normalizes, tourism should have less influence on price. New York is anticipating new legislation for short-term rentals, which could impact the supply of hotel rooms, allowing hotels to increase their prices on peak demand days.

Africa Due to the size and diversity of Africa, the report predicts there will be a spread of interest rate increases across the continent.

The IMF has warned that Sub-Saharan Africa’s economic performance is especially vulnerable to geopolitical tensions.

Asia China reopened its borders in early 2023 for travel, marking a significant milestone for the travel industry in Asia. As travellers begin to return to this global growth leader (forecast to experience a 5 per cent GDP expansion in 2024) it is anticipated that hotels will increase their rates significantly. After experiencing only modest price increases last year, hotels are looking to regain their financial footing.

Australasia Inbound visitor numbers to Australia and New Zealand have rebounded although have not yet recovered to 2019 levels. Rates will continue to rise but new openings in key cities should help moderate increases.

Despite the ongoing investment in hotel inventory, cities like Boston, with limited new supply, may experience a significant increase in prices.

Latin America Hotel prices will continue to rise due to high inflation leading to modest growth expected for 2024.

Europe Hotel prices are on the rise in 2024, but at a slower pace compared to 2023, despite modest economic prospects and a strong hotel development pipeline.

Middle East Hotel development is at a historic high across the Middle East but with strong GDP growth fueling travel demand, hotel rates will continue to rise.

Winter 2024 |

staymagazine.ca

|

23

HUMAN TRAFFICKING & THE HOSPITALITY INDUSTRY

AN OUNCE OF PREVENTION IS WORTH A POUND OF CURE PART THREE in our series

By Stacey Newman

This is the third instalment in our STAY Magazine series on human trafficking.

This segment is focused on Canadian hoteliers and hotel employees and why they feel it is imperative to remain vigilant, outspoken and educated about this criminal activity that too often takes place in or around hospitality businesses.

24

|

staymagazine.ca

|

Winter 2024

Human Trafficking

Chelsea Hotel Toronto's approach to combat human trafficking in the hospitality industry In conversation with Tracy Ford, director of public relations + Gary Myers, director of services and security TRACY FORD AND GARY MYERS ARE EXPERIENCED HOSPITALITY PROFESSIONALS. With 55 years of combined

experience working at Canada’s largest hotel (Chelsea Hotel Toronto has 1,590 guest rooms)—Ford and Myers have been integral to the growth and success of the hotel, sustaining its position in the city and the country as a destination hotel in one of Canada’s most bustling urban centres.

Being at the heart of a travel and tourism hub, both Ford and Myers, in their respective roles, recognize the need for vigilance around a taboo that comes with the territory of hotel operations—the shadowy reality of human trafficking within hotel premises. Ford and Myers, and Chelsea Hotel Toronto’s team of department heads, are staunch advocates for the prevention of human trafficking, as well as developing programs and support for staff members who are uniquely positioned to spot and report the signs of trafficking in the day-to-day hotel operations.

I spoke with Ford and Myers about the hotel's proactive strategies, with an emphasis on the pivotal role hotels can and must play in combating this pervasive issue. This article shines a light on Chelsea Hotel Toronto's unique perspective and multifaceted initiatives to prevent human trafficking and support victims of human trafficking.

We begin our discussion by defining the anonymity factor that enables human trafficking to thrive within hotel settings. Myers highlighted how traffickers strategically choose establishments by scouting establishments where anonymity is most achievable.

Myers stressed that every single type of hotel, no matter how large or small, luxurious or not, is a potential target for traffickers.

He then underscored the importance of training hotel staff, especially in housekeeping and security, to recognize signs of human trafficking.

Training sessions equip employees with guidelines on observing guest behaviour, identifying suspicious situations, and understanding when to involve law enforcement. The emphasis is on creating an environment where every staff member feels empowered and safe to report the signs of human trafficking whenever necessary, says Ford.

Insights from the Canadian Centre to End Human Trafficking reveal a disturbing pattern within the hospitality sector.

Chelsea Hotel Toronto actively participated in the industryspecific analyses, exposing how traffickers exploit the transient nature of accommodations, Ford explains. Central to Chelsea Hotel Toronto's initiative is dispelling social norms that discourage intervention. The hotel actively encourages staff to engage with guests, probing for signs of distress. By fostering an environment where employees feel confident intervening, the hotel aims to contribute significantly to the broader fight against human trafficking.

Winter 2024 |

staymagazine.ca

|

25

Human Trafficking

Gary Myers

Tracy Ford

Myers shared a real-life scenario where the hotel successfully identified and intervened in a human trafficking situation.

Security personnel played a pivotal role in ensuring the safety of an exploited young woman. Chelsea Hotel Toronto's commitment goes beyond removal; it involves collaboration with law enforcement to address the root causes of such incidents.

Myers and other department heads at Chelsea Hotel Toronto operate as a well-informed and activated unit. They have fostered relationships with Toronto Police to ensure they too have support around deterring and reporting human trafficking activity on the hotel premises.

Myers highlighted the importance of positive reinforcement when staff report potential issues. Recognizing and praising individuals publicly in team meetings nurtures a culture where everyone understands the value of their contribution to maintaining a safe environment. The hotel emphasizes the collective responsibility of the entire team, instilling a sense of ownership and accountability.

26

|

staymagazine.ca

|

Winter 2024

It takes a village to stop human trafficking.

The hotel's collaboration with law enforcement is built on trust and shared goals. Regular communication channels ensure seamless information flow between the hotel team and law enforcement agencies. Internal reporting systems, like an emergency radio channel, serve as crucial tools for prompt reporting of suspicious activities.

Chelsea Hotel Toronto's approach transcends mere compliance with regulations; it reflects a moral imperative to create a safe environment.

By actively participating in the fight against human trafficking, the hotel sets an example for the industry. Through vigilance, training, and a commitment to ethical principles, Chelsea Hotel Toronto showcases the impact proactive measures can have on combating this deeply troubling issue within the hospitality sector.

Human Trafficking

If you think someone is a victim of human trafficking, call the Canadian Human Trafficking Hotline at 1-833-900-1010, 9-1-1, or your local police. canadiancentretoendhumantrafficking.ca

Winter 2024 |

staymagazine.ca

|

27

Human Trafficking

Ottawa’s new immigration strategy, a missed opportunity to tackle human trafficking and exploitation?

In November 2023, the Canadian Centre to End Human Trafficking (CCTEHT) and Covenant House Vancouver commended the Government of Canada for the development of a comprehensive strategy aimed at enhancing the management of the country’s immigration system. However, the organizations also say the strategy fell short as a missed opportunity to tackle human trafficking and exploitation.

to permanent residency for low-wage migrant workers. These measures are essential for protecting temporary foreign workers from abuse and reducing their isolation and family separation.”

Froutan suggests that Canada has created a permanent underclass of workers in this country. CCTEHT and Covenant House Vancouver subsequently reaffirmed an urgent appeal to the federal government to create a more equitable, fair, and human rights-based system; calling for the immediate implementation of Open Work Permits, support for family reunification, and the establishment of a clear pathway to permanent residency. “These measures are not only necessary but also aligned with our commitment to ensuring a just and inclusive society for all,” says Froutan.

Throughout 2023, CCTEHT reportedly worked closely to identify the gaps and challenges with Canada’s immigration system.

The federal government’s new strategy “An Immigration System for Canada’s Future: A Plan to Get Us There” includes many actions that closely align with the recommendations outlined in CCTEHT research and labour trafficking and international students policy briefs. Therefore, CCTEHT has called on the federal government to implement the proposed measures without further delay; and the government must work with human trafficking survivors, front-line service agencies, provinces and municipalities to ensure effective and efficient implementation of the many actions outlined in the strategy.

“The new strategy, while taking a positive step forward,” says Aziz Froutan, spokesperson for CCTEHT, “is also a missed opportunity to comprehensively address human trafficking and exploitation of newcomers, international students and migrant workers. The Centre and Covenant House Vancouver express their profound disappointment in the exclusion of critical actions such as Open Work Permits, family reunification, and a pathway 28

|

staymagazine.ca

|

Winter 2024

Acknowledgements Information contained in this article was provided by the Canadian Centre to End Human Trafficking, the Royal Canadian Mounted Police (RCMP), and Statistics Canada. Special thanks to Tracy Ford, Gary Myers, and Chelsea Hotel Toronto.

Human Trafficking

happens in our communities.

If you suspect that you or someone you know may be being exploited, if you want to access support, or if you want to learn more, call:

1-833-900-1010

www.canadianhumantraffickinghotline.ca

Human Trafficking

Dollars & Sense

Dollars & Sense

Janak Bhawnani: The science of TrevPAR and the art of Canadian hospitality

By Caeli Mazara

JANAK BHAWNANI HAS BEEN IN HOSPITALITY SINCE HIS DAYS AS A HOTEL PORTER IN THE EARLY 1980S. What drew him to the

industry in the first place is the same thing that has kept him here for the last four decades: “At the heart of hospitality,” he says, “is human interaction.”

Bhawnani is a people person. While he started his hospitality journey in the hotel business, he’s now in the business of hotels.

“The two are symbiotic,” he explains.

The Westin Toronto Airport lobby

He was schooled in Switzerland at the École Hôtelière Les Roches—at that time, the school was only a couple of years old, but it is now one of the most well-known hospitality schools in the world. He trained at hotels in Switzerland and France before arriving in Montreal in 1989. He quickly became—at just twenty-six years old—one of the youngest food and beverage directors in the city, working at the Holiday Inn Select in downtown Montreal. In 1996, he moved with his family to the Greater Toronto Area (GTA), where he’s been making waves ever since.

Bhawnani’s resume reads like a list of his impressive accomplishments: He was responsible for conceptualizing and opening the Canadian-themed fine dining restaurant Tundra with Hilton Toronto Downtown. When working with the Marriott Toronto City Centre, he took their food and beverage team from the bottom of North American Marriott rankings to the top ten within a threeyear period.

Winter 2024 |

staymagazine.ca

|

31

Dollars & Sense

He is a champion of sustainability, lifelong learning, and ethical practices in the industry.

He recently celebrated his promotion to chief hospitality officer of the Easton’s Group, overseeing a portfolio of more than twenty hotels across Ontario and Quebec. Central to the role is financial planning and revenue estimates. Bhawnani says he enjoys the numbers side of things just as much as the human element and is excited about revenue management technologies he sees upcoming in the field.

His interest in the bottom line involves extensive use of the KPI (key performance indicator) known as RevPAR (revenue per available room) and the more exhaustive TrevPAR (total revenue per available room), calculated as total hotel revenue divided by total available rooms. TrevPAR takes into account all avenues of

32

|

staymagazine.ca

|

Winter 2024

income a hotel can have—food, parking, rental space, and more.

Bhawnani feels TrevPAR is a grossly underused metric in the industry.

“I just don’t hear people talking about it,” he says, “You have to look at TrevPAR, otherwise you’re missing the big picture.”

While some hotels don’t need to consider TrevPAR when assessing profitability—for hotels that do not offer paid services in addition to rooms the statistic will be irrelevant—for many others, ignoring TrevPAR in favour of RevPAR leaves out much, maybe even most, of the financial perspective.

For someone like Bhawnani, immersed in the business of hotels, meticulous attention to the data is a necessity. Reliably calculating revenue streams has never been more critical, in a

Dollars & Sense

time of economic recovery from the pandemic, and challenges for the industry. Bhawnani sees staffing as the biggest obstacle hospitality is facing.

“Young people don’t see hospitality as a career,” he explains.

“They spend a couple of years [in the industry], then they move on. You have to talk to them about the industry, tell them about opportunities for growth.” He also feels the industry has to move with the times, offering the flexibility that young workers are looking for.

He’s optimistic, though, about the future of hospitality in Canada, and is enthusiastic about the future of hotels in the GTA in particular. When asked where he would open a hotel, if he could choose anywhere in Canada, he replies without hesitation: “Toronto. The GTA is where it’s at.”

Bhawnani was inducted into the Ontario Hostelry Institute’s (OHI) Hall of Fame in September 2023 for his outstanding contributions to the hospitality industry. He has lived by and crafted a career around his personal maxim: “Success is a journey, not a destination.” His passion for hospitality is infectious, imbued in his every word.

If he could speak to that porter in 1982, just getting started in this exciting world of hotels, as well as a worker now, poised to join the industry, what would he tell them? He pauses for just a moment before giving his answer: “Learn everything,” he says.

“Don’t be afraid to move. Remember what this business is all about and you’ll rise to the top.”

EXPERIENCE .... the difference Hotel - Apartment - Long Term Care Renovations and New Builds

Baycon.ca 416-578-9997 | 403-483-6968

AI + Business

AI + Business

AIS COULD SOON RUN BUSINESSES— IT’S AN OPPORTUNITY TO ENSURE THESE ‘ARTIFICIAL PERSONS’ FOLLOW THE LAW American AI researchers and legal experts provide a road map for the future of doing business with AI. Authors: Daniel Gervais Professor of Law, Vanderbilt University

John Nay Fellow at CodeX - Stanford Center for Legal Informatics, Stanford University

ONLY “PERSONS” CAN ENGAGE WITH THE LEGAL SYSTEM—for example, by signing contracts or filing lawsuits.

There are two main categories of persons: humans, termed “natural persons,” and creations of the law, termed “artificial persons.” These include corporations, nonprofit organizations and limited liability companies (LLCs).

Up to now, artificial persons have served the purpose of helping humans achieve certain goals. For example, people can pool assets in a corporation and limit their liability vis-à-vis customers or other persons who interact with the corporation. But a new type of artificial person is poised to enter the scene—artificial intelligence systems, and they won’t necessarily serve human interests.

As scholars who study AI and law, we believe that this moment presents a significant challenge to the legal system: how to regulate AI within existing legal frameworks to reduce undesirable behaviours, and how to assign legal responsibility for autonomous actions of AIs. One solution is teaching AIs to be law-abiding entities.

This is far from a philosophical question. The laws governing LLCs in several U.S. states do not require that humans oversee the operations of an LLC. In fact, in some states, it is possible to have an LLC with no human owner, or “member”—for example, in cases where all of the partners have died. Though legislators probably weren’t thinking of AI when they crafted the LLC laws, the possibility of zero-member LLCs opens the door to creating LLCs operated by AIs. Many functions inside small and large companies have already been delegated to AI in part, including financial operations, human resources and network management, to name just three. AIs can now perform many tasks as well as humans do. For example, AIs can read medical X-rays and do other medical tasks, and carry out tasks that require legal Winter 2024 |

staymagazine.ca

|

35

AI + Business reasoning. This process is likely to accelerate due to innovation and economic interests.

A different kind of person Humans have occasionally included nonhuman entities like animals, lakes and rivers, as well as corporations, as legal subjects. Though in some cases these entities can be held liable for their actions, the law only allows humans to fully participate in the legal system.

One major barrier to full access to the legal system by nonhuman entities has been the role of language as a uniquely human invention and a vital element in the legal system.

Language enables humans to understand norms and institutions that constitute the legal framework. But humans are no longer the only entities using human language.

tax law advice, lobbying, contract drafting and legal reasoning.

An LLC established in a jurisdiction that allows it to operate without human members could trade in digital currencies settled on blockchains, allowing the AI running the LLC to operate autonomously and in a decentralized manner that makes it challenging to regulate. Under a legal principle known as the internal affairs doctrine, even if only one U.S. state allowed AI-operated LLCs, that entity could operate nationwide—and possibly worldwide. This is because courts look to the law of the state of incorporation for rules governing the internal affairs of a corporate entity.

We believe the best path forward, therefore, is aligning AI with existing laws, instead of creating a separate set of rules for AI. Additional laws can be layered on top for artificial agents, but AI should be subject to at least all the laws a human is subject to.

Building the law into AI

The recent development of AI’s ability to understand human language unlocks its potential to interact with the legal system.

AI has demonstrated proficiency in various legal tasks, such as

36

|

staymagazine.ca

|

Winter 2024

We suggest a research direction of integrating law into AI agents to help ensure adherence to legal standards. Researchers

AI + Business Law-abiding (artificial) business owners

could train AI systems to learn methods for internalizing the spirit of the law. The training would use data generated by legal processes and tools of law, including methods of lawmaking, statutory interpretation, contract drafting, applications of legal standards and legal reasoning.

If an LLC were operated by an AI, it would have to obey the law like any other LLC, and courts could order it to pay damages or stop doing something by issuing an injunction. An AI tasked with operating the LLC and, among other things, maintaining proper business insurance would have an incentive to understand applicable laws and comply. Having minimum business liability insurance policies is a standard requirement that most businesses impose on one another to engage in commercial relationships.

In addition to embedding law into AI agents, researchers can develop AI compliance agents—AIs designed to help an organization automatically follow the law. These specialized AI systems would provide third-party legal guardrails.

Researchers can develop better AI legal compliance by fine-tuning large language models with supervised learning on labelled legal task completions. Another approach is reinforcement learning, which uses feedback to tell an AI if it’s doing a good or bad job—in this case, attorneys interacting with language models. Legal experts could design prompting schemes—ways of interacting with a language model—to elicit better responses from language models that are more consistent with legal standards.

The incentives to establish AI-operated LLCs are there.

Fortunately, we believe it is possible and desirable to do the work to embed the law—what has until now been human law—into AI, and AI-powered automated compliance guardrails.

This article was previously published in The Conversation.

Park Hyatt Toronto, Canada

Our Promise to Developers: When you choose to work with Hyatt, you get more than just a development partner. You get an individualized growth strategy, a global business network, 60+ years of experience and high

Hyatt Centric Ville-Marie Montréal Quebec, Canada

value guests to fuel your vision. hyatt.com/development

The Walper Hotel, Kitchener, Canada | JdV by Hyatt

Spirit Ridge, Osoyoos, Canada The Unbound Collection by Hyatt

Stoneridge Mountain Resort Canmore, AB

Hampton Inn Lloydminster Lloydminster, AB

Courtyard Nanaimo Nanaimo, BC

Comfort Suites Regina Regina, SK

Contact us to learn how Canada’s leading third-party manager and development advisor can elevate your hospitality asset to its fullest potential!

Ryan McRae, SVP of Business Development ryan.mcrae@hotelequities.com

Elevate Your Expectations

Lending & Financing

Q1 2024: TRENDS IN CANADIAN

HOTEL FINANCING

WITH ED KHEDIGUIAN SENIOR VICE PRESIDENT CWB FRANCHISE FINANCE

By Stacey Newman

THE WORLD HAS EXPERIENCED SIGNIFICANT CHANGES OVER THE LAST YEAR, WITH THE PACE OF LIFE SEEMINGLY ACCELERATING THREEFOLD.

Ed Khediguian doesn’t likely need an introduction but for those who may not know him, Khediguian is senior vice president at CWB Franchise Finance and an editorial advisory board member at STAY Magazine. In this article, he lends us his expertise and thoughts on what he thinks 2024 has in store for the Canadian hotel sector, shedding light on the state of Canadian hotel financing, and the challenges and opportunities on the horizon for Canadian hoteliers.

Winter 2024 |

staymagazine.ca

|

39

Lending & Financing We’re still recovering The Canadian hotel industry continues to blaze a path to recovery after the tumult of the pandemic. We may be tired of hearing the words “recovery” and “resilience” but that does not change the fact that in Canada, we’re still recovering as we begin a new year and we are still seeing remarkable tenacity and elasticity in Canadian society, our economy and the hotel sector. To boot, 2023 has been an uncertain year for our economy with a great deal of unrest and uncertainty in the world.

What does this mean for lending and financing in the near future? With the aforementioned elements in mind, Khediguian notes that while there's a rebound in appetite from larger institutions, there's a selective approach. Certain credit unions, having faced challenges through the pandemic, are cautiously re-entering the space. The larger institutions, having taken a step back through the pandemic, are gradually recognizing the resilience of the hotel sector as a decent hedge against inflation.

This being primarily attributed to the ability to drive average daily rates in certain circumstances well beyond inflation rates, mitigating both the erosion in demand through the cycle as well as accelerating costs of operations.

Market dynamics and specialization Khediguian highlights the changing dynamics in other real estate asset classes, such as offices experiencing a significant downturn, and industrial and multi-tenant residential experiencing growth. With the pandemic in the rearview mirror, this has led to the hotel sector slowly coming back to the focus of a broader investor base. There's also a growing appetite for specialized sectors like industrial buildings, impacting structures and pricing.

Flying in the face of inflation The hotel sector has demonstrated remarkable elasticity during these inflationary times. Through the pandemic and recovery, the industry has maintained discipline in rate management.

Consolidation in hotel ownership across major markets in Canada has contributed to increased sophistication in operations, ownership, and pricing strategies. This awareness has played a role in the sector's ability to weather the challenges posed by inflation.

Lending institutions' focus(es) That being said, lending institutions that were in the space before the pandemic and who paused their originations, are now 40

|

staymagazine.ca

|

Winter 2024

re-entering the sector. However, they are doing so gradually and under a more charged regulatory environment, with the impact of an initial narrowing focus to better-capitalized, larger, more experienced borrowers. The impact on the lending landscape for hotels is of greater divergence of availability of capital between the larger, well-capitalized borrowers who are experiencing accelerating liquidity, versus the smaller, less well-capitalized portions of the sector facing tougher conditions in the near term.

Changing demand dynamics Demand in the hotel sector has seen shifts during the pandemic.

Corporate demand initially retrenched, but leisure demand compensated for it. Currently, corporate demand is continuing to recover to pre-pandemic levels, while leisure demand is expected to retrench as inflation and interest rate hikes start impacting consumer discretionary spending capacities. The sector is adapting to these changes, with a focus on sustaining profitability levels.

Outlook for hotel financing Looking ahead, Khediguian anticipates continued improvement and growth in hotel financing, with expansion concentrated in specific markets. Larger, better-capitalized borrowers will likely see more robust liquidity, while smaller borrowers may face more muted conditions. The industry's outlook will be influenced by factors such as supply, rate dynamics, and the evolving global landscape.

Lending & Financing Challenges and opportunities The interview touches on the challenges posed by heightened scrutiny from financial institutions, driven by concerns over headline risks. Despite these challenges, opportunities for financing remain standard, with a focus on renovations, expansions, rebranding, and repositioning.

The Canadian hotel financing landscape is undergoing a transformative phase, marked by recovery, resilience, and evolving market dynamics. As the industry adapts to changing demand and economic conditions, stakeholders must remain vigilant, navigating challenges and capitalizing on emerging opportunities for sustainable growth.

Ed Khediguian

Holiday Inn® Montreal Centre-ville Ouest

Crowne Plaza® Saint John Harbour View

avid® hotel Toronto - Vaughan Southwest

With a strong portfolio of brands, an expansive global footprint, and our transformed IHG One Rewards loyalty program, IHG® Hotels & Resorts is committed to the success of our stakeholders and our purpose to provide

True Hospitality for Good.

DEVELOPMENT.IHG.COM

©2024 IHG Hotels & Resorts. All rights reserved. Most hotels are independently owned and operated.

Policy & The Law

THE RISE AND FALLOUT OF SHORT-TERM RENTALS

By Stacey Newman With Alnoor Gulamani, President, Bayview Group of Companies

IN RECENT YEARS, the Canadian hospitality industry has witnessed a significant transformation driven by

the rapid growth of short-term rentals facilitated by platforms like Airbnb, Vrbo, and Booking.com. This evolution has prompted legislative and policy challenges by affordable housing activists, hotel industry representatives, the Hotel Association of Canada (HAC) and several provinces and municipalities actively promoting change.

Short-term rentals have become a significant issue in Canada, with an estimated 35,000 units across the country exacerbating an already acute housing shortage suggests Alnoor Gulamani, president, Bayview Group of Companies. Gulamani is an industry veteran, critic, and advocate regarding the current state of short-term rentals in Canada. Bayview is actively engaged in building and operating residential rental homes as well as hotels.

At STAY Magazine, we have tapped into Gulamani’s knowledge and opinions. Along with Gulamani’s consultation, we’ve done our homework to help Canadian hoteliers better understand this complex and pressing issue. This article should serve as both a crash course on short-term rentals and a report on where things are heading in 2024.

Winter 2024 |

staymagazine.ca

|

43

Policy & The Law Short-term rentals, a primer In recent years, short-term rentals have emerged as a lucrative and disruptive force in the Canadian housing and hospitality sectors. For Canadian businesspeople looking to understand this dynamic market, it's crucial to explore what short-term rentals are, why they pose challenges for legislators and policymakers, and their impact on both the housing industry and the traditional hotel sector.

What are short-term rentals?

Short-term rentals, often facilitated through platforms like Airbnb, HomeAway, and Vrbo, refer to the practice of renting out private properties, such as apartments, houses, or individual rooms, for short stays, typically less than 30 days. These accommodations cater to tourists, business travellers, and anyone seeking an alternative to traditional hotels.

The rapid rise of short-term rentals The short-term rental market in Canada has experienced exponential growth in recent years. According to statistics from HAC in 2019, the short-term rental industry generated approximately $2.8 billion in revenue, and this figure has grown significantly since then. This rapid expansion has brought several challenges to the forefront.

Challenges for legislators and policymakers • Regulatory framework: Developing a comprehensive regulatory framework for short-term rentals has proven to be a complex task. Legislators at three levels of government must balance the economic benefits of this industry with concerns over housing affordability, safety, and the preservation of residential neighbourhoods.

•

Housing affordability: Short-term rentals can exacerbate housing affordability issues. As homeowners and landlords realize they can earn more through short-term rentals than traditional leases, it can reduce the supply of available longterm rental units, driving up rents.

•

Community impact: Short-term rentals can change the character of neighbourhoods, as the constant turnover of guests may disrupt the sense of community and raise concerns about security and noise.

•

44

Fraud: There have been many fake short-term rental listings online that accept reservations and payments.

|

staymagazine.ca

|

Winter 2024

Impact on housing “We have no issue with the legitimate homeowner renting their unit while on vacation or part of their unit whilst they live there.

The issue is commercially operated multi-unit operators that are taking residential units and operating them as short-term rentals.

Commercial short-term rental operators are contributing to the housing crisis by taking homes off the market and driving up rents,” explains Gulamani. Seven out of ten short-term rentals units are operated as businesses, further limiting housing availability for long-term residents. The revenue potential for short-term rentals is incentivizing property owners to prefer short-term rentals over leasing to bona fide long-term residents.

“It is time for 30,000 units to be immediately added to the supply of rental housing in major cities across Canada facing a severe shortage of housing and affordable rents,” says Gulamani.

Municipalities have not been able to enforce existing regulations as short-term rental operators can flout residency requirements.

The schemes usually work by paying inducements on Facebook and other online sites to get people to change addresses on their driver’s licenses so they can register themselves on multiple apartments and obtain the required licenses. Recent federal government legislation is providing funding for municipalities to enforce regulations.

“Governments must follow the money trail and require platforms such as Airbnb to disclose revenues earned by hosts by issuing T 5 slips to CRA, etc. The fines need to be increased to be a real deterrence. It is easier to enforce through disclosure from these large platforms rather than thousands of operators,” he says.

The impact of short-term rentals on the Canadian housing market is multifaceted: •

Reduced housing supply: Some critics argue that the shortterm rental market reduces the supply of available housing units, making it harder for Canadians to find affordable longterm rentals or purchase homes [source: Canadian Centre for Policy Alternatives].

•

Increased housing costs: The competition for available housing can drive up prices, making it more expensive for people looking to rent or buy property.

•

Eviction and conversion: In some cases, landlords may evict long-term tenants to convert units into more lucrative shortterm rentals.

Policy & The Law Housing Policy “Government policy at all levels must focus on making it more attractive for the private sector to take on the many risks in developing housing including excessive regulations, uncertainty on construction costs, and high interest rates. Unfavourable capital gains taxes prevent efficient allocation of capital as it is punitive for builders to exit completed projects and recycle their capital into new projects. in the U.S., rollovers are allowed so that capital is recycled so much more efficiently, the housing market is so much more efficient and multi-family rents are coming down as builders compete for tenants,” states Gulamani.

Accelerated capital cost allowances and deferral of property taxes can also help stimulate housing construction.

Impact on the hotel sector Gulamani says that HAC has been at the forefront of advocating for fair competition and a level playing field in the hospitality industry. One of the primary challenges faced by traditional hotels is the difference in regulatory requirements and tax obligations. Hotels are subject to various taxes, including the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST), while short-term rental hosts often do not have the same tax obligations.

Furthermore, with the aforementioned impact of short-term rentals on housing affordability and the availability of long-term rental units in some cities, HAC argues that the proliferation of short-term rentals can lead to higher housing costs for residents and a decrease in the supply of rental properties.

Winter 2024 |

staymagazine.ca

|

45

Policy & The Law HAC has been engaged in advocating for legislative changes to address these challenges, calling for fair and consistent regulations across all types of accommodations, including shortterm rentals. The association argues that this would ensure a level playing field and create a fair competitive environment.

To address these issues, several recommendations are proposed: •

Increase fines and enforcement: Advocate for higher fines to cover the costs of enforcement and act as a deterrent.

•

CRA involvement and taxation: Encourage the Canada Revenue Agency (CRA) to enforce taxation on short-term rental hosts and require platforms like Airbnb to issue tax slips, facilitating income tax collection and data tracking.

•

Federal-provincial collaboration: Convene a federalprovincial housing table to accelerate the development and enforcement of regulations.

•

Market share: Many travellers now prefer the convenience and affordability of short-term rentals, causing traditional hotels to lose market share.

Updated regulations: Revise regulations to mandate that the host must live on the property (principal residence) and be present when guests stay. Additionally, impose a limit on the number of guests per stay.

•

Adaptation: In response, hotels are diversifying their offerings, enhancing guest experiences, and incorporating elements of the sharing economy to stay competitive.

Platform accountability: Hold platforms like Airbnb accountable and taxable, as they are easier to regulate than thousands of individual operators.

•

Minimum standards: Establish minimum standards for fire safety, security, and privacy to ensure the well-being of guests.

HAC's advocacy efforts have not been in vain, as some municipalities and provinces have taken steps to regulate shortterm rentals more rigorously.

Short-term rentals have disrupted the traditional hotel sector in several ways: •

Competition: Short-term rentals have introduced intense competition for hotels, often offering lower prices, unique accommodations, and a more personalized experience.

•

•

Perspective from major Canadian markets, provinces and territories Canada's approach to regulating short-term rentals varies by province and municipality. Many cities have implemented bylaws to address issues like noise complaints, zoning regulations, and taxation. Some provinces, such as British Columbia and Quebec, have taken a more comprehensive approach by introducing legislation to regulate the short-term rental market.

For example, in British Columbia, the government introduced the "Housing and Tenancy Act" in 2018, which required shortterm rental hosts to obtain a license and adhere to specific regulations. This legislation aimed to strike a balance between preserving affordable housing and allowing homeowners to participate in the sharing economy.

As of September 10, 2020, the City of Toronto requires a rental license for any rental lasting less than 28 consecutive days.

However, enforcement is a significant issue, as short-term rental owners find ways to circumvent regulations. Some even run over 100 units in cities like Toronto, thanks to lax enforcement and penalties as low as $1,000 per year.

46

|

staymagazine.ca

|

Winter 2024

British Columbia's response: •

In British Columbia, the Short-Term Rental Accommodations Act aims to tackle the growing challenge of short-term rentals diverting long-term rentals into the short-term market. The new rules strengthen local government tools for enforcement, return units to the long-term rental market, and establish provincial oversight. Key measures include increased fines, business licensing authority for regional districts, and a provincial principal residence requirement.

•

As Canada grapples with the impact of short-term rentals on housing availability, stricter regulations and enforcement measures are essential. Learning from global examples and adopting comprehensive policies, including taxation and platform accountability, can help strike a balance between the sharing economy and the need for stable housing options for Canadians.

Policy & The Law Global perspectives Examining the impact of short-term rental regulations globally, cities like New York City have implemented stringent laws— more specifically a piece of legislation entitled “Local Law 18”—to control the industry, resulting in Airbnb describing it as a "de facto ban" on its business. The regulations, enforced in September 2023, focus on collaboration with booking platforms, registration, and verification of hosts.

Looking forward The landscape of short-term rentals in Canada is continually evolving, with various provinces and municipalities taking steps to address the associated challenges. Advocates like Gulamani and HAC continue to lobby for fair competition and regulatory consistency within the hospitality industry.

As hoteliers and stakeholders in the hospitality industry, it is crucial to stay informed about the changing legislative and policy landscape. The ongoing advocacy efforts by the HAC serve as a reminder that the industry is adapting to the changing times, working towards a more equitable environment for all players.

Alnoor Gulamani Sources: • Investopedia – “Top Cities Where Airbnb is Legal or Illegal” •

Wired – “Airbnb Ban in New York City”

•

Government of British Columbia - Short-Term Rental Accommodations Act

•

The Hotel Association of Canada

Everybody wins when you buy a Milnor.

Your guests want quality.

That’s because Milnor knows industrial laundry better than anyone. Smaller facilities get superior wash quality and a low price from Milnor’s compact VRJ washerextractor. Larger facilities enjoy washing 100, 140 or even 160 lb. at a time in our larger models. They are built with RinSave® water saving technology to save water and time.

Contact an authorized Milnor distributor or call 504-712-7656 to find out more about washing more linen with less water than ever before.

You want savings.

WIN/ WIN

www.milnor.com

Currency Of The Future

Currency of The Future

Canadians have serious trust issues when it comes to a central bank digital currency

By Anwar Sheluchin PhD Student, Political Science, McMaster University

THE BANK OF CANADA RECENTLY PUBLISHED FINDINGS from its public consultation report on

a central bank digital currency, known as CBDCs. The findings reveal that financial privacy is top of mind for Canadians, yet those same Canadians do not trust the very institutions that would be responsible for handling data privacy and protection.

Put simply, CBDCs can be thought of as a digital banknote.

However, the key distinction between physical cash and digital currency is that using cash allows for anonymous and untraceable transactions because it’s not recorded anywhere. CBDCs, on the other hand, would record all transaction details in a centralized ledger.

Design features One of the most important CBDC design features identified in the consultation was the ability to make private transactions. Privacy is consistently ranked as one of the top concerns among public consultation reports in other countries.

To address some privacy concerns, the innovation hub of the Bank for International Settlements, a global financial institution owned by member central banks, is actively working on projects with those banks around the world, including exploring the possibility of cash-like anonymity for CBDCs. Ultimately, the level of privacy employed will be up to individual nations to determine.

CBDCs are often described as the safer alternative to cryptocurrencies like Bitcoin because they are backed by a reliable and trusted institution—in this case, the central bank.

Winter 2024 |

staymagazine.ca

|

49

Currency of The Future However, during a period of record-high inflation and a cost of living crisis, the Bank of Canada’s reputation has faced increased scrutiny from politicians and the general public.

Conservative Party leader Pierre Poilievre, for example, has attacked the credibility, financial literacy and independence of the central bank.

Is Parliament up to the task?

The decision to issue a digital Canadian dollar rests with the federal government. Yet there continues to be a lack of comprehensive discourse on the topic among Canadian politicians.

During his leadership campaign, Poilievre promised he would ban a Canadian central bank digital currency if elected prime minister. That’s a pledge the Conservative party continues to support.

50

|

staymagazine.ca

| Winter 2024

In the House of Commons, Poilievre has claimed that a CBDC would lead to government control of personal bank accounts, likening it to the situation faced by the so-called Freedom Convoy protesters.

That line of thinking seems to have resonated with some Canadians; one survey participant stated “A digital dollar sounded great until we saw the federal government freeze private bank accounts of its own citizens for supporting a political movement it disagreed with.”

The 2022 federal budget included an announcement of the government’s intention to launch a financial sector legislative review, focusing on the digitalization of money.

However, no additional statements or updates have been put forward and there has been virtually no discussion on the topic from Prime Minister Justin Trudeau or Finance Minister Chrystia Freeland.

Currency of The Future Building trust?

In contrast to Bitcoin, which operates in a trustless system that is not issued or managed by a central authority, CBDCs cannot succeed without trust.

Although participants self-selected into the survey, meaning the findings aren’t necessarily representative of the Canadian population, these findings should serve as a wake-up call for policymakers to do more to bridge the trust deficit that plagues public perceptions.

Historically, central banks have maintained high levels of public trust, but that reputation doesn’t necessarily extend to the digital sphere. A notable 87 per cent of respondents said they don’t trust the Bank of Canada to issue a secure digital Canadian dollar that is resistant to cyberattacks.

Currently, there is no appetite for a CBDC in Canada. If the central bank wants this to be a successful endeavour, it must continue to engage with Canadians through public consultations.

A majority of respondents—74 per cent—also completely distrust the federal government’s ability to protect personal payments data. That’s understandable given the class-action lawsuit launched against Ottawa in the wake of Canada Revenue Agency cyberattacks in 2020. This skepticism extends to the central bank, with 58 per cent expressing complete distrust in their ability to safeguard that data.

The decisions around CBDC design features must be transparent. The central bank must take the time to learn from lessons abroad. It will also need to develop an extensive digital Canadian dollar literacy campaign to clearly articulate the value of a CBDC.

Transparency required

WE DEVELOP. WE FRANCHISE. ALL ACROSS CANADA.

VISIT SUPERIORLODGINGCORP.COM OR CALL 403.543.8800

Currency of The Future Canadian politicians must engage in comprehensive discussions about a CBDC that are open to the public. An outright ban could potentially stifle innovation, and limit economic opportunities and the country’s ability to adapt to the rapidly evolving digital financial landscape.

The public consultation findings serve as a vital democratic tool offering Canadians and policymakers key data about public preferences and concerns. Understanding and addressing these concerns will be crucial in shaping responsible and inclusive policies for the future of digital currencies in Canada.

This article was previously published in The Conversation.

Knightstone Hotel Group (KHG) to provide Canadian Hotel Debt Financing - Senior and mezzanine debt available for profitable hotels with strong locations, national brands and professional management - Capital solutions: - PIPs - Strategic renovations - Acquisition LTV gaps - Divestitures/refinancings - Other special situations - Responsive, dedicated team that understands all aspects of hotel operations, finance, deal structuring and renovation/expansion programs for creative bespoke financing solutions

For more information, please email info@k-caphotels.com or call 416-306-2287, ext. 237.

KHG’s Canadian Hotel Debt Financing lending program is in association with the Oakbank Capital Group which is a licensed and regulated as a Mortgage Broker by the Financial Services Regulator of Ontario (FSRA Broker #13455).