Tourism recovery not yet felt by Lethbridge hotels
By Lethbridge Herald on December 13, 2023.
Bruce Primeau of the Lethbridge Lodging Association says the Alberta tourism recovery hasn’t reached city hotels yet.
Herald photo by Al BeeberAl Beeber – LETHBRIDGE HERALD – abeeber@lethbridgeherald.com
The province’s heralded tourism recovery hasn’t reached the Lethbridge hotel industry yet.
In late November, the Alberta government announced that tourism growth “is creating new opportunities for local businesses and supporting jobs for Albertans.”
A release from the province stated that in 2022 tourism spending in Alberta was $10.7 billion, up $600 million from 2019, which returned spending to pre-pandemic levels two years ahead of schedule.
The release stated that in 2021, Travel Alberta launched a three-year strategy called the Bootstrap Plan which was centred around the pillars of marketing, air access and destination development. The plan’s goal was to see the visitor economy return to pre-pandemic revenue levels by 2024.
However, at the recent Alberta Hotel & Lodging Association’s Ascend conference in Banff, it became clear that recovery hasn’t reached Lethbridge.
While hotel properties in similar-sized communities in Alberta have indeed rebounded, that isn’t the case here.
The hotel occupancy rate in Lethbridge in 2019 was 62 per cent. The average daily room rate (ADR) was $111. The revenue per available room (RevPAR)- a figure which shows how much revenue is being generated for bookings – was $69.
Fast forward to 2023, the occupancy rate in Lethbridge is now 52 per cent, down a full 10 per cent from 2019. While the average daily room rate has risen $13 to $124 the RevPAR figure has dropped $4 – and is the lowest in its group.
Medicine Hat is the only similar sized Alberta city to see a drop in occupancy and it’s only down one per cent since 2019 when the rate stood at 58 per cent. And while its ADR has risen $5 to $117, its RevPAR has also increased by $3 to $69.
Other communities including Grande Prairie, Red Deer and Fort McMurray saw jumps in all three categories since 2019.
Red Deer’s occupancy rate has risen 13 per cent to 57 per cent, Grande Prairie’s is up three per cent 65 per cent while Fort McMurray has seen its occupancy rate rise from 42 per cent to 51 per cent. In all cases, the revenue per available room has also increased, Red Deer’s increase the highest at $18.
For Bruce Primeau of the Lethbridge Lodging Association, whose 13 members represent 80 per cent of Lethbridge hotel capacity, the city numbers are concerning.
Lethbridge has always been about two years behind trends and while traditionally the hotel industry here has seen “bumps,” it has never experienced the peaks and valleys like other Alberta communities, he says.
“Lethbridge was an island of stability in a sea of uncertainty,” says Primeau.
The oil and gas areas of Fort McMurray and Red Deer always had those peaks and valleys but Lethbridge never saw them. And if Calgary experienced a drop, Lethbridge didn’t necessarily see that at the same time.
“We were kind of isolated from it due to the multi-faceted tourism opportunities in the region. We’ve always been a hub and spoke philosophy type of city,” says Primeau.
The LLA, says Primeau, has employed that “hub and spoke” philosophy since 2008, which sees Lethbridge as a base for tourism travel to destinations such as Waterton Lakes National Park, the Head-Smashed-Buffalo Jump and other locations in southern Alberta where visitors may want to explore before heading back to the city to stay, eat and shop.
“It’s a great strategy, it works well… when a tourism strategy switches and all your eggs go in one basket, whether it’s agri-food which is the big thing now, whether it’s Indigenous tourism or whatever, if you put all your eggs into one basket and you’ve got a tourism strategy specifically down that line, you don’t have the same spoke opportunity. You just have hubs,” says Primeau.
When he first built the Best Western in the W.T. Hill business corridor, his partnership group had experience in other Alberta mid-sized cities so they would see 10 companies with 3,000 rooms per year. In contrast, Lethbridge would see 1,000 companies with 30 rooms per year, he says.
Lethbridge’s tourism industry is a diverse one with leisure, sport and corporate elements all playing a role, says Primeau who has concerns about the Lethbridge and District Exhibition wanting to build a hotel on its premises to attract business to the Agri-Food Hub and Trade Centre.
In a recent presentation, city council heard that having a hotel on site is important but Primeau disputes that because there are places to stay extremely close to the new Hub.
Primeau says bluntly a new hotel – the cost to build being about $135,000 per door – is not viable right now in Lethbridge.
“There’s not room for another hotel here.”
He says any concerns about a hotel to attract business to the Hub could be alleviated if an access road was opened from the W.T. Hill area to the Exhibition site.
Sports tourism generates substantial business for city hotels annually for 17-20 weekends of the year and while the Tim Horton’s Brier in 2020, Primeau acknowledges, did bring visitors to Lethbridge who contributed to the local economy, he says that event displaced others that would have been staged in Lethbridge at the same time.
This, he suggests, calls into question the amount of actual economic benefit to Lethbridge because other sporting events would have also seen visitors shopping, dining and spending here.
“If it’s the same timeframe, it mutes your tourism impact,” says Primeau.
“We as hoteliers need to have a diverse strategy and not just put all our eggs into the sport basket or the corporate basket in order to be diverse enough to continue to see rooms coming even in the slower times,” says Primeau.
During the COVID pandemic, hotels, for example, had to lay off staff because tourism essentially died.
“When it comes to tourism, your strategy is super important.”
He also says if the local tourism focus is going to be entirely or largely on the Agri-Food Hub as a strategy, that focus goes back to strictly a hub mentality.
“That’s the strength of what tourism in Lethbridge has always been,” he says, of the hub and spoke philosophy.
A tourism strategy, says Primeau, is also needed that focuses on increasing tourism here in the periods of the year that aren’t already busy.
And Primeau also believes locally focused events such as Whoop-Up Days, which attracted record crowds in August with free admission, don’t bring people into Lethbridge from a tourism perspective because they aren’t staying here overnight.
“When you get these events that are locally centric, you’re back to your hub mentality and it’s not bringing in the spoke of the business that’s good for everybody. Tourism is hotels, it’s restaurants, it’s shopping.”
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But you fail to listen to people nearby in rural areas and towns who refuse to come downtown because of all the crime, open drug use and vagrancy.
I still remember having a concerned conversation with Erin Crane in the downtown tourist information office that was moved there, across the Alec Arms Hotel, when they closed both information offices at Brewery Gardens and Scenic Drive/Mayor Magrath Drive a few years ago, and she just didn’t get it. She thought the new location was great and there just wasn’t enough people stopping in the old locations. She said it is easier for the University students, but failed to understand that she moved it into the epi-center of the drug/crime crisis and there was no place for anyone to park their RV downtown. Now would you not expect a learned person in tourism to get that?
Sometimes I wonder if many of our leadership has spent too much time in clouds of Cannabis!
Administration continues to come up with out of touch ideas, because they don’t look at what is happening in our city. Some don’t even live in this city, but out of town!
Heads should have rolled over that stupid idea. Tourism 101.