Manteo Resort in Kelowna.

Image Credit: manteo.com

After two years of COVID-19 slowdowns for the hotel industry, it has bounced back to exceed the record-setting levels of 2019.

The pace of recovery and new construction in the Thompson-Okanagan is far beyond what’s happening in other parts of B.C. and Canada as a whole.

“When I compared the Thompson-Okanagan versus the B.C. average, then we’re seeing an outperformance in Thompson-Okanagan,” Laura Baxter, director of hospitality analytics for the CoStar Group, told iNFOnews.ca. “Kelowna is out-performing Vancouver, meaning they’re returning to the 2019 comparable levels quicker.”

CoStar analyzes data on hotel occupancy levels, room rates and supply. Baxter provided monthly data going back to 2014.

READ MORE: Okanagan hotels faring better than rest of B.C. with easing COVID-19 restrictions on tourism

Occupancy rates are not necessarily the most telling statistic because the number of rooms available is growing. Room rates vary significantly at different times of the year.

Total revenue earned in the region may be a better reflection on the health of the industry. In the Thompson-Okanagan, from January to the end of August this year, hotels brought in $432.7 million. That’s only $11.3 million less than for all of 2019. The average rate for the region’s 15,910 rooms peaked at $249.25 in July.

That broke the previous high of $227.66 in July 2021. In July 2014, the rate was about $149.93.

Kelowna, which has about 24% (3,846) of the region’s hotel rooms brought in $114.20 million for the first eight months of this year, $10.5 million less than all for all of 2019. Kelowna’s average room rate hit an all-time high in July of this year at $272.55.

READ MORE: Got that post-pandemic travel bug? Be prepared to pay more for scarce hotel rooms

By comparison, Vancouver, which has 30.5% of the province’s 82,218 rooms fetched an average rate of $300.62 per night. The B.C. average was $269.80.

All this success comes at a time when the travel market is far from fully recovered from COVID.

“Certain segments are lagging,” Baxter said. “International travel is down by about half compared to 2019. Corporate travel was down 12% in the second quarter from 2019. Group travel was down by about the same amount over the last three months.”

Despite those factors, Canada’s hotel industry has recovered faster than both the U.S. and United Kingdom.

“What’s driving the surplus over 2019 is the domestic leisure market,” Baxter said. “Very similar to last summer, many people decided to vacation locally rather than, before, they might have gone internationally.”

All this business is also leading to a boom in hotel construction, especially in Kelowna.

“If you compare what’s currently under construction versus the existing room supply, in Kelowna, about 8% of the current supply is under construction whereas nationally it’s about 1.6%,” Baxter said. “So there’s a lot more construction happening in Kelowna compared to the rest of the country.”

Five years ago, in August 2017, there were 3,162 hotel rooms in the city. Another 684 have been added in the last five years.

During that same five-year period, only 394 new hotel rooms were added throughout the rest of the Thompson-Okanagan.

And there’s lots more on the way in Kelowna to add to the 40 hotels the city now has. More than 700 more rooms have been approved or are in the planning stages, including:

• 200 – Courtyard by Marriott, Airport Business Park
• 54 – Expansion of Four Points by Sheraton, Airport Business Park
• 82 – Expansion of Ramada on Highway 97
• 48 – Expansion of Super 8 on Highway 97
• 160 – Proposed for Kelowna Airport
• 175 to 184 – Proposed for Westcorp in downtown Kelowna

Kamloops has 50 hotels on Baxter’s list with 3,067 rooms.

There are two new hotels proposed for Kamloops that are expected to open in 2025. Both are Marriott hotels. The Courtyard by Marriott has 135 proposed rooms while the Town Place Suites has 85.

In Penticton, the 105-room Four Points by Sheraton is currently under construction near the trade and convention centre.

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