Rising number of Kelowna hotel rooms not scaring off developers hoping to build more - InfoNews

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Rising number of Kelowna hotel rooms not scaring off developers hoping to build more

Westcorp's plans for a 174-room hotel will add to the number of new rooms hitting the Kelowna market.
Image Credit: Westcorp
January 22, 2020 - 3:45 PM

Trevor Morgan isn’t worried that the number of hotel rooms will soon jump by more than 10 per cent in Kelowna.

Nor is the director of Argus Properties’ hospitality division worried that Kelowna city council turned down another hotel application near Kelowna Airport two years ago. That’s why, earlier this week, his company filed a rezoning application for a third hotel in the Airport Business Park.

“Based on the demand right out at the airport and the success of the Four Points is the reason we’ve built a second hotel out there,” Morgan said. “We don’t plan on building the third hotel immediately but, based on the demand out there, we think there’s further opportunity in that location.”

The Four Points by Sheraton opened in 2013 with 120 rooms and was full almost immediately, he said, having an occupancy rate of 80 to 90 per cent each year. That compares to a rate of less than 65 per cent in the rest of the city.

The Hampton Suites, with 140 rooms, is set to open Feb. 3. How well that hotel does will determine how soon a third hotel – with 160 rooms planned - will be built, if the land is rezoned.

In 2018, Pier Mac Petroleum Inc. — which owned and developed the business park — tried to rezone land north of Quail Ridge Boulevard in order to build a Sandman Hotel. That was turned down by city council. Planning staff, at the time, said that a hotel at that site would not fit in with neighbouring uses.

The Argus application would put the new hotel right next to its other two hotels, south of Quail Ridge Boulevard. An operator for the hotel has not yet been selected.

In the city as a whole, there are currently about 3,500 hotel rooms, according to numbers provided to iNFOnews.ca by Tourism Kelowna.

Along with the Hampton opening, Hyatt Place at the corner of Spall Road and Enterprise Way and the Microtel Inn on Highway 97, will add another 363 rooms this spring.

Westcorp is planning a 174 room hotel at the foot of Queensway in downtown Kelowna and Beyrouti Holdings is proposing 216 rooms at the corner of Water Street and Leon Avenue, although that may change to rental apartments.

Kelowna’s hotel occupancy rate was below 60 per cent until 2015 and peaked at 64.1 per cent in 2016. It dropped a bit for two years because of forest fires in the area but, from January to November of 2019 jumped to 68.1 per cent. Final figures for the whole year won’t be available for a few weeks.

The national hotel vacancy rate has been around 64 per cent from 2012 to 2018, Tourism Kelowna said.


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