The Sutton Place Hotel at Kelowna Airport will add 230-263 rooms to the city's stock.

Image Credit: Submitted/City of Kelowna

Two consecutive years of high occupancy are triggering interest in building more hotels in Kamloops. At the same time, numbers are lagging behind in the rest of the Thompson and Okanagan regions.

Hotel occupancy for Kamloops was at 68.8% in 2023 fuelled by occupancy of 88% or higher in each of July, August and September.

While that was down from 72.6% in 2022, it is still well ahead of the pre-COVID 2019 rate of 63.6%, which was a record year for the BC tourism industry.

The city’s success is due in part to the fact Kamloops is not as reliant on tourism as areas in the Okanagan.

“It seems like there are more sources of demand,” Laura Baxter, director of Canadian hospitality analytics for CoStar Group, told iNFOnews.ca. “There is a kind of commercial side to Kamloops but also the leisure side of the business, so a lot of different demand generators for hotels."

CoStar lists 3,127 hotel rooms in Kamloops, up only 44 from 2019, but that is about to change.

“We don’t have any hotels under construction currently but we do have some in the final planning stages, expected to break ground in the next 12 months so," Baxter said. "Definitely, the success of the market has been noticed."

The new hotels are a Hyatt and a Ramada by Wyndham.

Kelowna, in comparison, only reached a 60.2% occupancy rate in 2023, down just slightly from 60.4% in 2022 and down from 63.7% in 2019.

Its best month was only 77.6% in July. Occupancy fell to 38.9% in December.

“I was actually quite shocked to see occupancy so low,” Baxter said. “This year you had the lack of snow so some of the ski resorts opened in December compared to November last year. Then there was the tourism ban in the summer. That certainly didn’t help. And the fires didn’t help.”

CoStar recorded 3,481 hotel rooms in Kelowna by the end of 2023, up 194 from 2019. The Sutton Place Hotel, Which is planned for Kelowna Airport, will add 230-263 to that total.

READ MORE: New hotel will take Kelowna airport “to the next level”: director

Baxter did not have a breakdown for individual Okanagan cities but the occupancy rate for the South Okanagan came in at 43.7% for its 5,188 rooms. That region stretches from Hope to Cristina Lake.

The North Thompson Okanagan region goes from Lake Country to Valmont and from Revelstoke to Merritt but does not include Highway 97. It has 7,200 rooms which reached a 57.9% occupancy rate in 2023.

Along with the lower occupancy rates in Kelowna, revenues were down 3.3% to $146.3 million. The average room rate was $188.79, peaking at $258 in July.

Revenue for Kamloops hotels was up 3.3% to $119.1 million. Average room rates were $152.12, peaking in August at $182.65.

For the province as a whole, occupancy was up 4.4% to 69%, revenues were up 14.6% to almost $5 billion and average room rates for the year were $240.82.

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