Canada / Coronavirus Insights
The Reopening of the Hospitality Industry in Canada

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by Eva Koronios, Industry Research Analyst
May 28 2020

The reopening of the hospitality industry in Canada is characterized by increased cleanliness efforts and a shift away from event hosting. Due to the effects of the coronavirus, IBISWorld anticipates the economic output of the Hotels and Motels industry in Canada (IBISWorld report 72111CA) to decline 5.4% in 2020. With many countries either suspending international travel, limiting flights or closing their borders entirely, the industry’s heavy reliance on tourism has caused industry operators to go into crisis mode, as almost 98.0% of the market is attributed to either business or leisure travel.

Nevertheless, many parts of Canada are beginning to enter a tenuous phase of recovery as infection rates decline, though hotels, motels and resorts in some provinces are in a better position to reopen compared with others. That said, however, the process as a whole remains uncertain at present, with the future of the hospitality industry riddled with questions. What are some of the challenges that operators will have to contend with as they seek to reopen the Canadian hospitality sector? What will reopening look like for hotel guests and employees?

 

New safety regulations

 Going forward, heightened sanitation standards are anticipated to be adopted by the industry to mitigate the risk of infection. On May 21, the Hotel Association of Canada (HAC) and the American Hotel and Lodging Association released joint health and safety protocols restructuring industry standards amid the pandemic. These include the more frequent disinfecting of so-called “common touch surfaces” such as door handles, light switches, remote controls and faucets; removing and replacing items that are difficult to clean (e.g. bedding); limiting furniture in hotel lobbies; installing acrylic shields at concierge desks; painting social distancing markers on floors where required; and equipping staff with personal protective equipment as needed.

Moreover, some hotels in New Brunswick, which are already beginning to reopen as the province enters the third stage of its coronavirus recovery plan, are also making a point of taking the temperatures of their staff before they come in to work their shifts, in addition to having a thermometer on hand at the front desk for their guests. Overall, an increased focus on preventative measures is expected to help the industry gradually regain its footing.

 

 

A changing landscape for industry operators

 Still yet, some operators may have to further augment the above efforts by reimagining what the traditional hotel stay looks like and adapting to the changing times if they wish to weather the storm. For instance, the HAC is recommending that rooms be cleaned only once per stay if possible, suggesting that rooms remain vacant for up to a week after occupancy so as to ensure their cleanliness. Furthermore, hoteliers may have to begin operating at anywhere from 5.0% to 50.0% capacity at first, so as not to reopen too quickly and cause a resurgence in infections.

Perhaps most importantly, the primary revenue stream of many Canadian hotels as locations for conferences, trade shows, wedding receptions, galas and business conferences has dried up indefinitely, with officials unsure of when large gatherings may once again become an aspect of everyday life. To this end, hotels that primarily make their living from hosting such events will have to rebrand to become more family-friendly. In this way, they may keep attracting guests in place of hosting conferences, which may not be as lucrative but will help to maintain business continuity.

With IBISWorld forecasting enterprises to decline 0.8% in 2020, it is evident that some hotels will not make it past the crisis. In an industry that was already highly competitive before COVID-19, it is imperative moving forward that operators find the right balance of reopening while also adhering to the new guidelines set forth by the HAC. Although stringent, these preventative measures will help to ensure the safety of both hotels and their patrons during an unprecedented time of Canadian socioeconomic history.