Opinion: Vancouver's tourism at risk without urgent action on hotel construction
Unless urgent and meaningful steps are taken, Vancouver risks losing out on tourism dollars, economic development, and even its reputation as a premier global destination.
Tourism is changing, and Vancouver needs to keep up
British Columbia’s tourism sector has bounced back faster than almost any other in North America. Visitor numbers are reaching new heights, and Vancouver remains the crown jewel of the province, consistently ranking highly for livability, outdoor activities, and cultural attractions.
But tourism is evolving. No longer driven solely by international travellers, a new wave of interprovincial tourism is reshaping the landscape. Amid political uncertainty in the United States and a growing sense of Canadian pride, more Canadians are choosing to spend their travel dollars at home.
This shift represents a major opportunity for Vancouver, but only if the city has the infrastructure to support it. Without enough hotels, Vancouver won’t just struggle to attract new visitors; it will struggle to retain the ones it already has.
Today, Vancouver’s hotel occupancy rates are among the highest in North America, often exceeding 80 per cent annually and spiking to 95 per cent during peak seasons. Room prices have surged in response, pushing visitors toward nearby cities like Richmond, Burnaby, and Surrey or encouraging them to bypass Metro Vancouver altogether.
The rising importance of tourism and the service sector
Tourism and hospitality are now cornerstones of Vancouver’s economy, employing tens of thousands across hotels, retail, restaurants, entertainment, and recreation. Crucially, these are industries that artificial intelligence and automation are unlikely to displace anytime soon.
Hospitality jobs, chefs, housekeepers, front desk staff, concierges, and tour guides require creativity, adaptability, and human connection. They also offer increasingly high wages, particularly in Vancouver’s high-cost environment, with hotel housekeepers now earning close to $40 per hour at many downtown Vancouver hotel properties.
If Vancouver wants to build a resilient, inclusive economy that offers pathways for a wide range of workers, investing in the infrastructure that supports tourism, namely, hotel development, is essential. These jobs sustain not just employment, but the vibrancy and diversity that make Vancouver a city unlike any other.
Big events, conventions, and the everyday traveller
It’s easy to focus on the big-ticket events, the 2026 FIFA World Cup, premier global conferences like the official TED Conference, and massive conventions filling the Vancouver Convention Centre. These are vital for economic development and international exposure.
But it’s the average traveller, families, couples, solo tourists, and business travellers who form the backbone of Vancouver’s tourism economy. And for them, the experience is becoming increasingly inaccessible.
Hotel room shortages have pushed nightly rates sky-high, limited availability, and created a visitor experience that is pricing out middle-class Canadian families and casual travellers.
Those who do come often stay in other cities, fragmenting the economic benefits that should stay in Vancouver’s core.
Without affordable and diverse hotel options across the city, Vancouver’s reputation as an inclusive, welcoming, world-class destination will erode.
High demand is not enough without supply
High tourism demand isn’t a success story if the city cannot meet it. This becomes a liability.
According to Destination Vancouver’s recent study, the city of Vancouver alone needs at least 10,000 additional hotel rooms by 2050, a 70 per cent increase over current inventory. The shortage will become acute starting later this decade.
The growing shortage is already being reflected by Vancouver having the highest average nightly room rates among Canada’s major urban centres.
Across the entire Metro Vancouver region, 20,000 additional hotel rooms are needed over the same period.
Even if every approved hotel project were built today, Vancouver would still be thousands of rooms short.
Yet while the need is well-documented, the City of Vancouver’s moves to date have been far from bold.
In April 2025, the Hotel Development Task Force — a partnership between Destination Vancouver and the B.C. Hotel Association — released an in-depth report outlining Vancouver’s hotel needs and recommended new policies.
That same month, Vancouver City Council approved new policies recommended by City staff to help catalyze new hotel projects, generally focusing on enabling greater hotel density at strategic sites within the downtown Vancouver peninsula and Broadway Plan area, near SkyTrain stations across the city, and major retail streets.
But there are no meaningful financial incentives offered to developers, no flexibility from outdated design standards, no fast-track program to expedite hotel applications, and no commitment to 12-month hotel approvals equivalent to the framework of the City’s 3-3-3-1 housing strategy.
At a time when cities like Toronto, Seattle, and Calgary are moving aggressively to expand tourism infrastructure, Vancouver’s caution and inertia could cost it billions in lost revenue and cultural opportunities.
Outdated design requirements are blocking progress
Vancouver’s hotel shortage isn’t just a market failure, it’s a regulatory one. Outdated engineering and planning requirements are actively discouraging hotel construction.
Current rules require hotels with more than 200 rooms to provide dedicated tour bus parking. But in today’s reality, with public transit, ride-hailing services like Uber, and smaller hotel footprints with scarcity of land, this requirement is outdated and unrealistic. Removing it would create enormous flexibility for modern hotel developments.
In mixed-use developments combining hotels and residential, the City currently mandates separate loading bays for each use, rather than allowing shared or flexible loading spaces. This requirement drives up construction costs and wastes valuable urban space.
If Vancouver wants to see hotels built instead of just approved, planning policies must be modernized to reflect today’s travel patterns and market realities.
What the City must do now
If City Hall is serious about solving the hotel crisis, it must shift from talk to action. The real measure of success is not the number of approvals issued, it’s the number of hotel doors that actually open.
Here’s what the City needs to do:
- 1. Financially incentivize hotel construction
- Defer or waive development cost levies (DCLs) for hotel projects.
- Offer property tax relief for a set number of years post-completion.
- Create a fast-track approval system specifically for hotels.
- Embrace mixed-use and strata models
- Allow residential strata to subsidize hotel development for financial feasibility.
- Permit greater building height and density for hotel-hybrid projects.
- Modernize planning and design policies
- Eliminate outdated tour bus parking requirements.
- Allow shared loading areas for mixed-use hotel projects.
- Pre-zone sites, especially near transit and major corridors, for hotel use.
- Build strategic partnerships
- Form a permanent Hotel Development Task Force including developers, operators, Destination Vancouver, and the BC Hotel Association.
- Measure success by physical hotel openings, not just project approvals.
Vancouver’s global reputation is on the line
Vancouver stands at a critical crossroads. Global travel patterns are shifting, Canadian tourism is booming, and major international events are already locked into the city’s future.
But none of that potential will materialize if visitors can’t find a place to stay or if they leave feeling Vancouver is inaccessible, overpriced, or disorganized.
City officials must move urgently. Turning project approvals into real-world construction and creating the incentives necessary to bring hotels out of the ground must become a top priority.
The cost of inaction isn’t just economic. It’s cultural, reputational, and social. Vancouver’s future as a vibrant, welcoming, world-class city depends on getting this right.
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