COVID-19’s adverse effects on Oakville's hotel industry

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COVID-19’s impact on industries within Oakville, Ontario has been widespread; however, the travel and tourism industry have been hit financially the hardest by the pandemic. Prior to the coronavirus, Canada’s hotel industry was projected to enjoy its most successful year yet.

According to Colliers International 2019 Canadian Hotel Investment Report, 2019 was the most profitable year for hotels during the last 30 years. Low operating costs, a weakened Canadian dollar, and historically-low financial costs piqued the interest of global investors, which seemingly looked to pave a path of prosperity for the hotel industry.

Despite the adverse effects of COVID-19, the Canadian lodging sector is projected to transition to growth when global markets enter a recovery phase. The next few years signal hardships for Oakville hotels and B&B’s, as they look to recoup from financial encumbrances.

Quality Suites Oakville

Quality Suites Oakville has faced several challenges as a result of restricted travelling and the lockdown period, according to General Manager Samarth Jhanjee.

“Aside from the implications COVID has caused for tourist traffic within Oakville, the lack of measures taken by businesses to guarantee tourist safety has provided us with some obstacles,” said Jhanjee.

Occupancy rates dropped by over 70% in March.

As a result of the economic lock-down in March, occupancy rates dropped by over 70%. However, they decided to remain open in order to support essential workers who needed a place to stay while working. Since then, the hotel has experienced more positive trends that suggest business could return to normal once more.

“Our occupancy rate in July was 50% more than it was in May. We have started to provide residence to construction workers, and we have started to recall employees who were temporarily laid off,” says Jhanjee.

Currently, Quality Suites is offering a promotion of 20% off their regular rate, and Jhanjee is hopeful this reduced price point will adhere to the needs of prospective travellers.

With the pandemic taking a large toll on small business owners, it is no surprise that local bed and breakfasts have felt the effects of coronavirus, and increased precautions taken to adhere to cleaning protocols.

Bed & Breakfasts

Like many Ontarian bed and breakfast owners, Walnut House B&B and Melfort Cottage remain closed amidst the coronavirus pandemic. COVID-19 has caused many bed and breakfast owners to rethink the challenges associated with running a B&B in the current economy, and the costs associated with maintaining large properties.

Government support

The requirement for travellers to quarantine upon entry to Canada has cost the Canadian government up to $37 million in accommodation fees so far, with over 3,000 returning travellers being quarantined by public health officials. It has provided hotels with an increased influx of revenue and traffic, which has garnered appreciation from industry stakeholders.

Holiday Inn Oakville

“During the pandemic, the federal government has stepped up by liaising with the municipal and provincial government efficiently, the subsidies provided have helped us keep afloat amidst the pandemic,” says Saleem Jakar, General Manager of Holiday Inn Oakville.

Municipal Accommodation Tax

The increased initiatives taken to aid the hotel industry during COVID-19 have gained appreciation from many; however, hotels would benefit from being exempt from the Municipal Accommodation Tax (MAT). It is a mandatory 4% rate on hotels and individuals offering short term rentals to travellers.

“It would be extremely beneficial if the city could help local hotels by reducing this tax temporarily due to the increased expenses,” says Jakar.

The tax, which was launched on January 1, 2018, came into effect at a time when the hotel industry was seemingly on an upward trajectory growth. However, as local and regional hotels begin their long quest to recover from losses, any form of government assistance would suffice.