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Hotel-to-condo developments are threatening Toronto’s convention business: report

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Toronto could lose thousands of well-paying jobs and much of its thriving hotel-based business due to downtown condo development, warns a report from a hospitality workers’ union.

The city is facing about a dozen potential hotel-to-condo developments that would cripple the $8.6-billion meetings, convention and incentive travel (MCIT) industry, says the report by Unifor Local 7575 researcher David Anderson.

But it’s not just hotels turning into condos that threatens business, it says. While more affordable venues such as the Clarion and Best Western Primrose have closed, many of the new hotels opening in the downtown core are luxury brands with smaller room counts such as the Ritz Carlton and Shangri-La.


“While 5-star hotels are a welcome addition to the city’s tourism offerings, they do not typically support large meetings which rely on mid-range hotels that offer large blocks of affordable rooms,” the report says.

The union is asking the city to adopt a proposal in a November, 2017, report from the city’s general manager for economic development and culture to zone a portion of downtown as a convention district that would protect hotels in that region.


That city report says MCIT is “by far the most lucrative tourism-related sector,” and that competition for major conventions is “intense.” The only way to reliably attract that business, it says, is to develop and maintain a large supply of hotel rooms that are close to each other.

Toronto’s tourism sector has been growing for years, Deputy Mayor Ana Bailão said at a press conference for the report’s release Tuesday, calling it a “key economic driver” for the city. “But now,” she said, “the great success story is under threat.”

“Losing these rooms would be devastating for the future of MCIT business in Toronto,” she said.

The report’s authors estimated 4,000 rooms and 2,500 jobs would be lost if all the proposed developments go through. Losing two of the hotels under threat of redevelopment – the downtown Courtyard by Marriott and the Chelsea Hotel – would mean losing 1,500 rooms.

Victor Jiminez, who has worked at the Courtyard for more than 10 years, said hotel jobs are crucial to the people who work them. Room attendants make just over $20 an hour, he said, and about two-thirds of hotel workers are immigrants.


“Hotels offer good jobs to people who often face barriers” to those jobs, he said.

Steven Tufts, an associate geography professor at York University, said Toronto would be foolish to hamstring the convention industry during one of the “most significant tourist booms Toronto has ever seen,” which he attributes partly to the low Canadian dollar.

“What would happen if it was announced this week that the Ford Oakville plant was closing for a housing development project?” he said. “There would be riots.”

But since the hotel industry largely affects marginalized workers, he said, job protection isn’t taken as seriously.

For the most part, Toronto can’t compete with global convention destinations such as Berlin and London, but it does need to be attracting regional business away from cities like New York and Boston, Mr. Tufts said. With the closing of affordable meeting spaces, even cities like Hamilton are at risk of scooping chunks of Toronto’s business, he said.

It’s important to sound the alarm now, as large events are often booked as long as six years in advance, said David Chisholm, vice-president of sales for the Metro Toronto Convention Centre.


“Look at the World Cup," he said. “We are getting into the murky waters of not being able to bid on future conventions.”


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Re: l'article cité (conversion d'hôtels en condos à Toronto)  --voici mon analyse simplifiée:

1) D'une part, dans ce  marché  spécifique actuel, il est plus rentable  du point de vue privé de convertir un bâtiment abritant un hôtel en condos.  2)  D'autre part, du point de vue public, les retombées économiques directes et indirectes liées à l'opération des hôtels sont supérieures à celles associées aux résidences.  3)  Il faut trouver des moyens d'inverser le calcul privé.  4) Puisque à mon avis il ne saurait être question de diminuer la rentabilité de l'option «condos», il faudrait se tourner sur celle consistant à améliorer suffisamment la rentabilité des opérations hôtellières.  Cela devrait pouvoir se faire en allégeant le fardeau fiscal supporté par ces opérations, directement ou indirectement. 5) La ville, le gouvernement provincial et le gouvernement fédéral bénéficient de ces opérations par le biais de taxes et d'impôts. 6) Solliciter une intervention fédérale serait trop compliquée, compte tenu des exigences de traitement équitable à l'échelle du pays. 7) Restent  la ville et la province.  Pour cette dernière, la même exigence d'équité à l'échelle provinciale s'appliquerait.  x*) Reste donc seulement la ville qui pourrait abaisser  les taxes spécifiques aux chambres d'hôtels, mais elle devrait le faire à l'échelle du territoire de toute la ville, pas seulement le centre-ville. 9) Malheureusement,  ça pourrait ne pas être suffisant pour inverser le calcul des investisseurs privés. 10) De plus, il se pourrait que (pour la ville) les taxes foncières sur les condos seraient plus avantageuses que les revenus (allant à la ville) découlant des opérations hôtellières.

Le problème de base est toujours le même: les gouvernements (fédéral et provincial) retirent la majeure partie des taxes et impôts découlant d'une activité économique,  tandis que c'est la ville qui est appellée à faire les sacrifices nécessaires pour maintenir/promouvoir cette activité.

* pour la seconde journée consécutive une malfonction? m'empêche d'utiliser le chiffre huit...

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