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Empty hotels hoping for summer travellers

Pandemic has hit Alberta hospitality industry hard

In nearly 30 years in the hotel business, Vimal Pillay has never had to lay anyone off.

COVID-19 changed that.

“It’s going. We’re keeping the doors open. But it’s not good right now,” said Pillay, general manager of Ramada By Wyndham Red Deer Hotel and Suites at 6853 66th St.

“We’re starting to see a little bit more business activity — families, not so much. Right now, it’s a struggle.”

Alberta’s hotel industry has been hammered by the pandemic — and no region more so than central Alberta.

The occupancy rate in Red Deer in April was 9.5 per cent, according to an Alberta Hotel and Lodging Association survey.

“That’s a dreadful number,” said association president and CEO Dave Kaiser. “But it’s been a tough market for some time.

“All last year, for the year, it was 43.6 per cent occupancy, and did not have a healthy room rate either. It’s been a challenged market for several years, quite honestly.”

A consulting firm that analyzes hotels estimated current occupancy at 18 to 20 per cent in Alberta, but only 13 per cent in Red Deer.

In mid-May, the association estimated about 120 hotels were closed completely — many of them large chain hotels in Edmonton and Calgary — because of the pandemic. About 70 per cent of rooms were also locked up temporarily.

Kaiser said those numbers have likely improved, but “we’re nowhere near any recovery with all of the travel restrictions,” he said.

One industry watcher estimated it could take Canada’s hospitality industry three years to get back to 2019 levels.

For Alberta, 2019 is hardly a reassuring benchmark.

“In 2019, in Alberta, the industry was close to being on the brink in many cases, certainly in the Red Deer area before then.”

Kaiser believes Red Deer’s market has suffered from overbuilding.

“It has not been a strong market for many, many years, but you still had a fair amount of development there.”

Overbuilding has not just been a central Alberta problem. In the past five years, the number of rooms has increased 20 per cent, yet the economy is barely back to where it was five years ago.

Sites such as AirBnB have also added the equivalent of 60 hotels with 100 rooms each.

At the Ramada, Pillay said when health restrictions were at their tightest, business was down 80 per cent.

“It was crazy.

“But it’s one of those things. We’re slowly opening up. We’re waiting for Alberta Health to give us the OK on opening the pool and stuff.

“Then, hopefully, we can get the families travelling with kids.”

Red Deer’s hotels have counted on visitors drawn to the area for the dozens of sporting events that used to go on every weekend — especially in summer.

“Normally, in the summer, we stay pretty busy, but it’s all local, Calgary and Edmonton, within Alberta, a few from B.C.

“Family reunions, weddings and all those types of things used to bring in people.

“That’s almost at a standstill right now.”

As well, at least for now, large sporting events remain postponed. Indoor gatherings are restricted to 50 people, and outdoors, up to 100 people can congregate.

Those travelling for business — many connected with the city’s once-thriving oil and gas services sector, and others in town for conferences and conventions — were also a stable customer base. Gathering restrictions obviously limit much of that activity.

Pillay expects to see more visitors stop by as people start travelling again. At least until July 21, the border remains closed to non-essential travel between the U.S. and Canada, which might convince some people to explore their own backyard.

“We might see them here. Let’s wait and see.”

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