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Airbnb doesn't compete with Kamloops, Kelowna hotels but still stalling recovery

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In the past year, the number of short-term rentals in the Thompson-Okanagan region has grown by 11.3% to almost 5,000.

Those rentals are marketed to tourists so it would be logical to assume that hotels and motels, still struggling to recover from COVID cutbacks, would be railing against them cutting into their business.

That’s just not the case.

It’s their impact on the long-term rental market that is really hurting hotels.

“The hospitality industry’s workforce crisis has been the single greatest barrier to sector recovery,” Ingrid Jarrett, president of the BC Hotel Association, said in an email to “After hearing from accommodation and tourism operators from across B.C., it became clear that the lack of access to affordable housing is one of the most significant causes of our workforce shortage.”

A study commissioned by the association came up with the data on the 11.3% increase in the region, which is actually far below the provincial growth rate of 17.8%.

The study found that 340 long-term rental units had been converted to short-term in the region in the last year alone and rents have gone up by an average of $34 per month because of that.

READ MORE: Commercial Airbnbs cost Thompson-Okanagan renters hundreds of extra dollars every month

On the hotel occupancy side, data compiled by CoStar Group, an international firm that tracks room rates and usage, showed about a 10% drop in hotel room occupancy in BC in August, partly due to travel restrictions imposed because of wildfires.

In July, before the fires hit, BC was basically on par with 2022 but both Kamloops and Kelowna were down by about 4%.

“What we have seen over the summer – especially in leisure driven destinations like Kelowna that had benefitted from an early recovery (from COVID) and benefited from that staycation demand in the pandemic – many of those locations dropped in occupancy just because they had had that early recovery. Then, this summer, they started competing with overseas travel,” Laura Baxter, director of hospitality analytics for CoStar in Canada, told

The short-term rental market, sold through platforms like Airbnb and VRBO, caters to a different clientele than hotels, she said.

“They are two different products because in an Airbnb or a short-term rental, you don’t have that service element,” Baxter said. “In hotels, you do have the service element.

“Throughout the last year, we’ve seen the service economy rebound significantly. That goes to show people are sourcing out those services they may not have returned to earlier in the pandemic but now are kind of prioritizing, including services within hotels.”

The short-term rentals do very well in markets where there is a shortage of hotel rooms versus areas with lots of hotels, she said.

The bellwether year for the hotel industry in BC was in 2019, before COVID hit.

Back then, Kelowna had an August occupancy rate of 78.9% with an average room rate of $202 a night.

This year, the occupancy rate dropped to 71.3% but room rates jumped by about $40 a night to $242.

Part of the drop in occupancy is due to the fact that since 2019, four more hotels have opened in Kelowna so there are more rooms to fill.

In Kamloops, the August 2019 occupancy rate was 89.4% and rooms went for $136 per night.

This August, occupancy dropped to 84.4% but rates jumped $44 per night to $180 compared to 2019.

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