Vancouver craves for new hotels with visitors in trouble to find a lodging

To build the 10,000 hotel rooms Vancouver urgently needs by 2050 to keep pace with growing demand, the report released earlier this year by Destination Vancouver and the BC Hotel Association, outlines a clear strategy to meet this target while boosting jobs, animating neighborhoods, and unlocking billions in economic activity.

Shifts in the real estate market—such as declining demand for offices—have created a rare window of opportunity for hotel development.

Worries among travel professionals

“Hotel development needs to be seen as a city-building tool, said Royce Chwin, President & CEO of Destination Vancouver. “We’re seeing unprecedented interest for investment in new hotel properties in Vancouver. There is an opening to take swift action, otherwise capital will move wherever conditions are more favorable.”

Destination Vancouver’s 2023 study on the lack of new hotel capacity demonstrated that without new investment, that lack of hotel supply would translate into significant losses to the provincial economy.

Following the publication of that report, Destination Vancouver and the BC Hotel Association formed the Vancouver Hotel Development Task Force to take concrete action on the issue.

Made up of representatives from industry and the City of Vancouver, the goal of the Task Force is to identify and recommend strategies to enable a sustainable and appropriate supply of new hotel development.

“This is about more than hotel rooms—it’s about building a vibrant, resilient city. Hotels are economic engines and social anchors,” said Ingrid Jarrett, co-chair of the Task Force with Chwin and the former CEO of the BC Hotel Association. “They support jobs, events, tourism, local businesses, and can enliven neighborhoods.”

This new report was commissioned by the Task Force and was undertaken in parallel with a report City staff has been preparing for presentation to Council on April 15.

Hotel Crunch Threatens Growth

Vancouver hotels are operating at near full capacity, with 80% average annual occupancy and up to 95% during peak seasons—well above rates in peer cities.In 2024, Metro Vancouver had a supply of 159 hotels offering 22,937 rooms. Vancouver alone had 77 hotels with a capacity of 13,007 rooms.

At the same time, Western Canada metropolis welcomed 11.3 million overnight visitors last year, generating 9.6 billion direct economic impact.

While 62% of all overnight visitations came from the domestic market (7 million), Vancouver’s largest international market was the USA. With more than 2.6 million overnight visitors, the U.S. had a market share of 23% of Vancouver total visitation.

International overseas visitation was approximately 1.7million for 2024. Top international markets by visitor volume include Australia, the UK, Mexico, China, Japan and Germany. Declining numbers in international arrivals in the first months of 2025 (-1% in Q1 2025) should slightly reduce the accommodation shortage.

Declining supply in hotel capacity for the last 20 years

Meanwhile, the lack of new capacity makes it increasingly difficult to attract major conferences and marquee events and meet visitor demand.

As year-over-year visitor growth continued until 2024, hotel shortage became a major challenge. If the available hotel rooms in Metro Vancouver remain unchanged, an increasing number of visitors will be unable to find hotel accommodation—especially in the higher demand summer months.

Tourism stakeholders main issue is a marked decline in hotel supply. Between 2002 and 2022, Vancouver saw a net loss of hotel rooms, largely due to hotel closures and conversions. The pandemic removed as an example 550 rooms from the city’s inventory, all converted into supportive housing by public authorities.

Meanwhile, development stalled: just 12 new hotels were built in the last 20 years. “Vancouver has the same number of hotel rooms as we did 2002,” said Chwin. “There are 22 projects currently in the development pipeline, representing approximately 4,200 rooms, which is encouraging. We’re looking forward to the industry moving ahead with these new projects.”

Five Hotel Models to Drive Growth and Inclusion

Five hotel development scenarios tailored to Vancouver’s neighborhoods and market needs are detailed in the report. Each scenario offers a scalable model to deliver a mix of price points, hotel types, and community benefits across the city.

The Event Space: Large, luxury hotels with state-of-the-art meeting and event spaces
The Big Brand: Large full-service hotels at an upper mid-market price point located near transit and attractions.
The Familiar: These are limited-service, extended-stay hotels in local commercial districts.
The Basics: Modern, budget-friendly options that cater to young people.
The Urban Resort: High-end, boutique hotels offering unique local experiences.

Massive Economic Impact Within Reach

If the needed 10,000 new hotel rooms are built, the report forecasts:

5,450 direct local hospitality jobs.
Up to 8,000 indirect jobs in retail, events, and services.
$125 million in annual municipal tax revenue.
$78 million in provincial tax revenue.

To overcome development barriers, the report outlines recommendations, including:

Deferring development charges.
Pre-zoning for hotel use in transit-oriented areas.
Creative solutions for parking and loading.
Pairing hotels with residential developments.
Building strategic partnerships to reduce risk and boost demand.

“We’re grateful to Destination Vancouver for their leadership in bringing the industry together and providing clear recommendations through this report,” said Vancouver Mayor Ken Sim. They’ve been an invaluable partner in the Hotel Development Task Force, collaborating with City staff to shape proposed updates. They aimed at encouraging new hotel developments and supporting a thriving visitor economy.”