Flats hotel feeler falls flat from flaccid figures

Hotel feasibilty study conducted for village of Canal Flats

It’s not a lucrative choice to build a hotel in Canal Flats. At least not yet, according to a report presented to Canal Flats Council by a company that specializes in feasibility studies.

Canal Flats commissioned CBRE Limited to investigate the possibility of pursuing a hotel build in the village. David Ferguson of CBRE presented their findings via teleconference at the Council meeting Tuesday, November 13th.

“Don’t look at a hotel as being a catalyst for economic development,” he told Council. “We don’t believe a hotel, unfortunately, for Canal Flats at this time would be a viable opportunity.”

Mr. Ferguson walked Council through a 20 minute presentation, taking a brief look at the accommodations market in the Columbia Valley, projected market demand over the next few years, and informed estimates on what volume of guests a potential hotel would attract.

Across the region, Mr. Ferguson said the occupancy rate ranges between 40 and 50 per cent annually.

“It’s very high seasonality you deal with in that part of the province,” Mr. Ferguson commented from his Vancouver office.

Currently, Canal Flats only has one public accommodation: the Paddler’s Inn, owned by Mayor Karl Sterzer, which offers two vacation rental suites and one standard cabin-themed room for rent, and only for multiple-night stays.

The way to make a hotel viable in the Flats would be finding a way to draw in overnight visitors Sunday to Thursday, in the seven to eight months of year that do not typically bring in a lot of visitors to the Valley, Mr. Ferguson suggested. Otherwise, the profit margin is too low for most major hoteliers to sign on at this time.

“The projected financial returns are marginal at best,” said Mr. Ferguson.

Should Canal Flats want to move forward with a potential hotel, CBRE made a few recommendations. One, it should be located on the highway. Two, it should be a ‘limited service, midscale-branded hotel’, meaning there is a nationally recognized name attached to the hotel branding such as Best Western, Ramada, or Travelodge. Three, it should include a small restaurant or breakfast room, a meeting room, fitness room, be situated on 1.5 to 2 acre property, and include an indoor pool.

“You would be at a competitive disadvantage,” without a pool, Mr. Ferguson said.

CBRE Hotel’s projected capital costs to build a 50-room hotel in Canal Flats would be roughly $6 million, not including the land.

The two main sources for potential revenue streams would come from build-out of the Columbia Lake Technology Centre, and the flow of visitors to the Canal Flats Arena which is well-used by teams from Alberta who come for weekend tournaments each season.

Adrian Bergles, Canal Flats CAO, said this winter there are 19 out-of-town tournaments booked for the Canal Flats Arena. The tournaments are running from mid-October to the end of March, and this year’s numbers are similar to years past for bookings. Eight teams per weekend, with typically 15 youth players per team plus families, descend on the Flats for the games. There are no readily available statistics for how many visitors are seeking overnight accommodation to Canal Flats on an annual basis aside from the hockey traffic.

Following Mr. Ferguson’s presentation, Council had several questions. Councillor Doug McCutcheon asked whether hotels in conjunction with senior’s home residences has ever been considered to help generate higher occupancy rates. Mr. Ferguson cited several examples where either a seniors home/hotel has been combined, or the potential to convert later on, has been done.

“There is potential it can be done,” Mr. Ferguson said, adding further population trend discussions would need to take place should the Village wish to investigate that option further. No further direction was provided to staff at the Council meeting on the matter.

In answer to Mr. Sterzer’s query on when it would be worth revisiting the idea of a hotel, Mr. Ferguson said when Brian Fehr (who owns the former CANFOR lands and has plans for multiple projects that could bring in new business and residential development) moves his project along, there could certainly be potential to re-investigate building a hotel.

The feasibility study cost $15,000, paid for by a BC Rural Dividend grant.

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