Destination Vancouver started its analysis of Vancouver’s hotel shortage in earnest nearly 10 years ago, examining decades of data and taking stock of the impending capacity issue the city would face as its tourism sector continued to grow.

Since then, the organization has released several forecasting reports about the future of tourism and the potential impacts of the hotel shortage, all while working closely with the City of Vancouver’s (‘City’) planning department to improve the development landscape and address the shortage. This work culminated in 2023 with the creation of the Vancouver Hotel Development Task Force (‘Task Force’), which brought together key stakeholders—including Destination Vancouver, the City, and the British Columbia Hotel Association—to further assess the challenges and put forward actionable solutions.

This case study examines the work the Task Force completed in its initial two-year period, during which it worked with Cascadia Partners to develop the Hotel Community Impact Assessment, released in April 2025. The assessment outlines five hotel development scenarios, demonstrates how Vancouver can meet demand for diverse hotel offerings, and offers recommendations to capitalize on the city’s current real estate market cycle, which is favourable for hotel development.

The Task Force's assembly, objectives, and impact assessment process will be highlighted, as will the ways in which partners collaborated and aligned around a common interest, working together to identify possible solutions, review policy supports to encourage hotel development, and drive increased investment in hotels. Reflections and lessons other destinations can use to replicate similar work will also be outlined.

While Vancouver’s destination marketing organization, now operating as Destination Vancouver, was formed in 1902, tourism’s upward trajectory in the city, including hotel development, truly kicked off in the 1980s thanks to Expo ‘86.

“It put Vancouver on the map in so many different ways and set off a period of significant investment in hospitality and hotel construction,” explains Gwendal Castellan, Manager, Sustainable Destination Development for Destination Vancouver and Task Force Secretariat.

Much of Vancouver’s current hotel inventory started being developed in the mid-1980s, with the Municipal & Regional District Tax—a provincial tax of up to 3% levied on short-term accommodations (hotels, vacation rentals, etc.) in participating BC municipalities to fund local tourism marketing and related initiatives—being established in 1987.

In the late ‘80s, Asia-Pacific investment began flowing into Vancouver’s real estate market, accelerating with increased immigration and capital from Hong Kong in the late 1990s. Although Canada entered a recession in the early ‘90s, Vancouver and much of western Canada remained relatively unaffected. Hotel investment in the city continued throughout this period, with many of today’s hotels having been constructed by the early 2000s.

The September 11 attacks in 2001 and the SARS outbreak in 2003 disrupted tourism worldwide; however, Castellan notes that once the immediate impacts of these events subsided, Vancouver’s tourism industry entered a period of growth that lasted until the financial crisis struck at the end of 2007.

“There was hotel construction that was initiated before the financial crisis, so it did come to pass,” he says. “But it was a rollercoaster through the 2000s, and it wasn’t really until 2012 or 2013 where we saw a return to sustained year-over-year growth in visitor volume and all major metrics.”

While four additional properties opened in the mid- to late-2000s in preparation for the 2010 Olympics, the sustained tourism growth in the years that followed did not translate to hotel development, despite strong City policy to reserve development sites for commercial use in the Central Business District, which primarily includes the central and northeastern portions of downtown Vancouver, over the long term.

In 2017, Destination Vancouver began examining years of data to take stock of the city’s hotel capacity issue and consider the future of tourism. The organization engaged Resonance Consultancy and Tourism Economics (a branch of Oxford Economics) to conduct a scenario-planning exercise on the future of tourism in Vancouver, resulting in the 2030 Draft Scenario Report released in 2018.

Around the same time, Castellan had a chance meeting with the City’s (now retired) Senior Downtown Vancouver Planner, Michael Gordon, who was concerned about preserving—and potentially expanding—the hotels along Granville Street, in part because of their impact on retail businesses there.

“One of the hypotheses he was working with was that visitors spend more per day close to where they're staying than residents [in the area],” recalls Castellan.

Recognizing strong alignment between Gordon’s concerns and the scenario report's results, Castellan outlined the potential outcomes a lack of hotel capacity could have in the region. This sparked a close working relationship between Destination Vancouver and the City’s planning department, which was critical to advancing solutions and effecting policy changes.

Gordon’s work at the City and the collaboration between the two organizations helped advance the Interim Hotel Development Policy (approved in July 2018), which emphasized maintaining and expanding hotel rooms in the downtown core. The policy introduced zoning changes and included land-use policy to support development. It also instructed City staff to monitor room inventory to ensure “no net loss” until the Broadway Plan and City Core 2050 report—created to provide guiding frameworks for growth in the region around the Broadway Subway and in Vancouver’s core—established new targets.

For its part, Destination Vancouver continued to explore the findings of the 2030 Draft Scenario Report, which led them to commission MNP to conduct further economic analysis of the hotel supply and projected demand. An update to MNP’s initial 2019 report was released in 2023 to align with the City’s planning, which was projected through to 2050.

The MNP report highlighted key factors—rising hotel demand, stalled hotel development, and global disruptions, including the COVID-19 pandemic—that had reduced hotel capacity in the region. Findings showed that Metro Vancouver would need an additional 20,000 hotel rooms (10,000 of those in the City of Vancouver) by 2050 to keep pace with growing demand. Without new investment, the lack of hotel supply in Metro Vancouver would create significant economic losses across the province, including a projected $30.6 billion in foregone economic output between 2022 and 2050.

“Our Council took that information and passed a motion directing the planning department to report back with land-use policies to help support the growth of hotels,” explains Matthew Bourke, Senior Planner, Employment Lands, City of Vancouver, who sat on the Task Force.

The Hotel Supply Gap to Support Tourism Economy motion, building on the interim policy and Destination Vancouver’s advocacy work, also directed City staff to participate in a yet-to-be-formed hotel development task force.

With the updated 2023 hotel supply and projected demand report in hand and the idea of creating a task force top of mind, Destination Vancouver took the reins to move forward.

The Task Force was formed in the fall of 2023. The group’s terms of reference required participants to make an initial two-year commitment, which Castellan says was key to maintaining engagement and fostering a sense of accomplishment.

In its lead role, Destination Vancouver—previously focused solely on destination marketing and sales as Tourism Vancouver—put its new destination management mandate into action.

“It seemed natural that we take a collaborative approach with the BC Hotel Association (‘BCHA’) because we felt the work we could do together on this project around hotel development, or lack thereof, could have greater ramifications for the province if we focused on the big goal of building a strong visitor economy,” says Destination Vancouver’s President and CEO, and Task Force Co-Chair, Royce Chwin.

“Everything we did, we wanted it to have that community, societal, and actual activation impact included…what impact a [hotel] property has and how it contributes to the liveability of a community,” adds Ingrid Jarrett, then BCHA President & CEO and Task Force Co-Chair.

Bringing on members of the City’s planning department, including Director, City-Wide and Regional Planning, Chris Robertson, and two members of his team—Bourke and Economic Development Planner, Sean Martinez—was an obvious choice given the existing relationship with Destination Vancouver, the extensive work the department was already doing, and the directive from the 2023 Council motion on City participation in a task force.

Additional Task Force partners included:

• Hudson Pacific Properties and Bosa Properties, real estate companies with hotel development experience.
• Arcadis Architects, a firm with residential and hotel/multi-use development experience.
• Pacific Destinations, an event production and destination management company that could bring the perspective of clients planning destination events.

“We knew what each contributor’s role would be in identifying where there were barriers or where there were solutions to barriers. It was a very solutions-oriented Task Force,” explains Jarrett.

From the start, as Chwin explains, Task Force members had “a real desire to make change.” This was furthered by the hotel development policy work the City was conducting, which included hiring a land economist to look at potential redevelopment sites.

“We could bring some of those findings to the Task Force, which had private sector developers on it,” explains Bourke. “They were a sounding board for where we were going. We learned that hotel projects have a harder time accessing financing and that incentives were needed to level the playing field with other types of development, such as residential.”

He adds that the City updated its Broadway Plan in 2024 to “support new growth through regulation updates” and “to identify different areas where hotels could also be an option,” a first step toward regulatory updates with the Task Force.

The collaborative work undertaken during the initial months of the Task Force informed its decision to commission the Hotel Community Impact Assessment, providing insight into the range of roles hotels play in the community.

Once that decision was made, the Task Force issued its Request for Proposal, which led to Cascadia Partners being selected to conduct the impact assessment.

“In terms of the scope and the objectives, we really started with the community impact piece and wanting to know at a pretty detailed level what type of hotel has what type of impact in different neighbourhoods within our community, and then communicating that effectively to the public, developers, and city planners,” explains Pietra Basilij, Partner, Cascadia Partners (‘Cascadia’).

Basilij and the project team developed a multi-step methodology that included:

• Creating hotel scenarios based on combinations of unmet demand, target clientele, differing neighbourhoods, and hotel typologies.
• Building conceptual pro formas of each scenario with an architecture firm, which included financial modelling to determine the profitability of each scenario.
• Grading scenarios as green, yellow, or red. Green scenarios were immediately supported, while yellow and red were further tested to assess whether interventions—such as increased density, reduced room size or construction costs, or adjusted parking requirements—could improve viability.
• Assessing viable scenarios for their economic, social, and community impacts using both qualitative and quantitative methods.

Workshops with the Task Force occurred every four to six weeks, and Cascadia conducted dozens of one-on-one interviews with the Task Force, industry members, and community experts.

The project team engaged stakeholders in different ways:

• Working with the City to review existing policies and opportunities for advancement.
• Collaborating with developers throughout the process to identify the main barriers to hotel development.
• Consulting hotel operators later to ensure recommendations aligned with operational realities and brand standards.

Throughout, Cascadia continuously validated assumptions and calculations, refining recommendations through ongoing collaboration with the Task Force and subject matter experts.

“Destination Vancouver and BCHA had done so much work to lay the groundwork for this Task Force that we found people, both on the Task Force and other experts in the community, were very willing to roll up their sleeves and open up their books to us,” says Basilij. “They were very forthcoming to make sure the report presents as accurate a picture as possible.”

The Hotel Community Impact Assessment was released at the BCHA Summit in April 2025. The City released its revised Hotel Policy, which included amendments and updates intended to encourage hotel development, at the same time.

As Jarrett explains, the Task Force benefited from strong political backing: “Council was very supportive of ensuring this work got done…we had a very business-friendly, development-friendly Council, we still do in Vancouver.”

Bourke notes that the City’s initial involvement with the Task Force enabled its team to work through technical details of mixed-use developments (hotel/residential) in downtown Vancouver, resulting in helpful changes to the City’s Central Business District Rezoning Policy.

“One of the biggest opportunities we found, which the City has already been exploring in different pockets, is allowing increased density for hotel development compared to other uses,” says Basilij, noting that this might mean “allowing an extra floor or two for a hotel development, adjusting floor space ratio (FSR) calculations to remove back of house spaces, or relaxing parking and loading requirements in areas where it makes sense to do so.”

On the development side, she emphasized that financial viability can also be influenced by rethinking expectations around room sizes and amenities, explaining that “there is a lot of flexibility in how you can design and operate your hotel,” particularly for independent properties. However, the strict design standards of large international brands can constrain that flexibility.

The analysis also revealed significant unmet demand in the local market, with Basilij highlighting gaps outside downtown, especially for more affordable midscale to 3-star, low-amenity, and long-term-stay hotels near residential areas—an imbalance that emerged when comparing Vancouver’s visitor profile with its existing hotel supply and with the hotel supply of competitor cities.

As Chwin notes, “the findings proved out that many sizes fit many different things, and the notion of the typical hotel build is not truly the picture of our destination and what we could do or should do relative to the communities where we think there are opportunities.”

The impact assessment underscores a rare window for hotel development in Vancouver, driven by a slowdown in residential and commercial construction. As Basilij notes, this shift has allowed hotels to compete more effectively with other land uses for the first time in decades, sparking renewed interest from developers and investors.

BCHA President & CEO, Paul Hawes, who now sits on the Task Force, says the momentum reflects growing awareness among City Council of the economic value of hotels, along with a noticeable trend of residential developers exploring hotel and mixed-use projects in Vancouver and Victoria. He adds that the report has broadened public understanding of the role hotels play in the local economy, thereby boosting lender confidence and signalling favourable economic conditions.

Jarrett emphasizes that while investors may take on risk, banks require robust data to evaluate it—data that had previously been missing. By filling those gaps, the report aligned investors, lenders, and policymakers around the true economic potential of hotel development. Several Task Force members described the work as positioning Vancouver as “open for business,” supported by detailed financial analysis that addressed lender concerns.

“Success for us is that…we’re actually seeing shovels in the ground and rooms being built,” states Chwin. “If we can exceed the [10,000 rooms] target and [2050] deadline because the work of the Task Force helped enable it, I think that is a massive success story.”

Bourke reports that the City is already seeing increased interest, with 5,000 rooms advancing thanks to viable projects already in the pipeline—up from less than 10 to nearly 30 because of the Task Force’s work over the past two years—plus approximately 2,000 additional rooms in the inquiry stage.

To support the pipeline, the City launched a dedicated Hotel Development page, shared through both the planning and economic development sections of its website. The page outlines zoning policies and provides a dedicated email address, managed by Martinez, that offers developers a concierge-style service to support and guide them during the early stages of a project.

For its part, Destination Vancouver is expanding its role in investment attraction by attending MIPIM—the world’s leading real estate event—for the first time in March 2026. Though hands-on development work falls outside the organization’s scope, Chwin sees an opportunity for Destination Vancouver to act as a connector.

“If we can tout the destination as a great place to do business, and a destination where developers and investors can see obvious benefits and a strong visitor economy, then we can make those connections with an investor to somebody who wants to build.”

While much has been accomplished, the Task Force’s journey isn’t finished. Both Chwin and Bourke highlight additional work to refine and evolve hotel development policy, while continuing to look for ways to speed up the process for developers. Ensuring this work filters out to the rest of Metro Vancouver is essential, too, since an additional 10,000 rooms are needed outside Vancouver proper.

“We have all these adjoining municipalities in [Metro] Vancouver, and we’re all servicing the same demand. We’ve been open and keeping that line of communication with our neighbours,” explains Castellan.

The impact assessment is already informing work in nearby Victoria, where Hawes is now part of a similarly set-up task force, and influencing broader initiatives across the country.

“The Hotel Association of Canada is doing some great work right now at a national level,” Castellan notes. “They’ve identified some really interesting data on a national scale…so we’re really excited to see that work in one major city in Canada is growing to a national advocacy perspective as well.”

The framework set out in Vancouver is highly transferable, with Task Force members noting that many communities already hold valuable accommodation and visitation data that can serve as building blocks for similar impact assessments. Understanding and organizing the data, prioritizing collaboration and relationship-building, and bringing together invested partners and experts to complete the work are vital to success.

At the outset, Hawes suggests that destinations ensure market conditions are right for hotel development—typically demonstrated by occupancies above 80 percent and consistent ADR growth—so that any working group or assessment is grounded in a realistic economic environment that will attract lender confidence. Where it makes sense, Jarrett recommends that smaller municipalities take advantage of regional collaboration opportunities.

As with the work in Vancouver, it is critical for destination marketing and management organizations (DMOs) to establish strong working relationships with those responsible for municipal planning and economic development, including Council members, as these are the individuals responsible for the land-use and development policies, including zoning and permitting, and for supporting developers as they bring projects to the table.

Leveraging these relationships and sharing knowledge supports strategic hotel growth. DMOs and other tourism partners, such as the BCHA, have the expertise in accommodation demand and market opportunities, which they can use to help educate municipal staff and Council throughout the process. Conversely, those working for the municipality can provide DMOs with insight into existing policies and processes, while also liaising with other departments and key people responsible for implementation. Task Force members reinforce that open dialogue between the public and private sectors is essential to understanding real development potential and avoiding purely theoretical discussions.

Key takeaways from the impact assessment process, as Basilij outlines, include:

• Get specific: It is important to go beyond a high-level view—build conceptual models that reveal the real challenges and opportunities facing different hotels and areas rather than relying solely on a 10,000-foot perspective.
• Understand market gaps: Start with unmet demand and demonstrated market interest, ensuring that the analysis focuses on serving market gaps rather than simply replicating existing hotel supply.
• Maximize policy impact: Complete a sensitivity analysis to test how different policy choices affect financial feasibility, helping identify which recommendations will have the greatest impact.
• Look local: Understand that the assumptions made about ownership and operating models matter significantly. Projects based on local ownership and operations tend to deliver greater community benefits than those relying on centralized, big-brand models.

Reflecting on the process, Chwin summarizes the broader lesson for other DMOs: “Shared intention on an identified goal can produce results. Identify the problem, pull the right people together to start taking action, show progress and solutions, and then cycle it back and communicate it out… it can be done, and it can make a difference. Collaboration as a strategic and competitive advantage. This is an example of exactly that idea.”