LETTER: Short-term rental restrictions are a gift to the hotel industry

Tourism Minister Lana Popham has extolled the strength of the tourism sector in the column “BC’s tourism sector a resilient economic engine.”

The column follows a familiar theme of allaying fears about the impact on visitors following the enactment of the Short Term Rental Accommodations Act, while celebrating the government’s apparent partnership with the hotel association.

Destination Greater Victoria (DGV) CEO Paul Nursey recently delivered similar news, saying restrictions on short-term holiday rentals will not hurt the visitor economy. Mr Nursey told us: “At the peak of summer travel in August 2023, hotel occupancy reached 86 percent,” reassuring that the visitor economy will remain unaffected by the upcoming ban on licensed short-term rentals (STRs).

Popham and the DGV likely understand the nuances of fluctuating tourism demand, which peaks during weekends, holidays and major events. They understand that an occupancy rate of 86% may mean that a room is available on Monday, but is fully booked from Tuesday to Sunday all summer long.

Despite the shortage of accommodation in Victoria, no new rooms have been added. Instead, the STRAA is removing 634 rooms from licensed STRs and accommodation in central Victoria. Even with five hotel projects in development, the combined rooms will not be able to meet the shortage. Furthermore, of the two approved projects, only the Hyatt (135 rooms) has a fixed completion date for 2026.

Popham knows that removing licensed STRs significantly impacts visitor spend. Along with occupancy rates, DGV has released surveys showing that the average number of traveling parties to Victoria is two, and the average summer spend is $232 per person. Eliminating licensed STRs creates a potential loss of more than $20 million in visitor spending during the summer. Driven from the STRs, 100,000 summer visitors will only see the vacancy on Monday evenings and will likely vacation elsewhere (if at all).

So why would Popham downplay the lost visitor dollars, and the DGV contradict an earlier position on accommodation shortages?

It starts with lobbying. The Office of the Registrar of Lobbyists of BC reports that the BC Hotel Association has registered to lobby the Minister of Housing regarding short-term rental policy and affordable housing. This ‘altruistic’ interest in BC’s housing crisis, particularly in getting rid of STRs, makes sense: licensed STRs account for 17% of Victoria’s visitor market share and have limited certainty for hotel investors.

The NDP was willing to forego validating research sources and skip details about economic impacts downstream. The NDP went even further by demonizing STR owners as the “greedy investors” that were not long ago celebrated as part of its “sharing economy.”

On April 18, Prime Minister Eby confirmed that “Hotels are great places for tourists to stay, but without the certainty that visitors can stay in hotels, there will be an indefinite or uncertain amount of AirBnBs competing, which investors in those hotel rooms could not decide to go on. It is very clear that now that these regulations are in place, there will be visitors staying in hotel rooms, there will be a market for hotel rooms and they will make a decision to proceed.”

As the variety and availability of accommodations in BC plummets and hotel prices rise, BC will become inaccessible to many. However, hoteliers will raise a glass, toast their partners and declare: “For the long-term health of the visitor economy!”

Nick Reynolds

Victoria

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