Hotel Industry Desperate For Communication, Help From Government
HALIFAX—Hotel operators who once hoped to salvage some of the tourist season are now staring down the barrel of a long, tough winter.
Hotel occupancy took a nosedive in Nova Scotia this year, and most accommodation businesses have barely survived with help from government programs.
But with an underwhelming tourist season winding down, and government programs drying up, many operators have no idea how they’ll make it through the slow season. And they’re fed up with what they feel is a lack of communication and support from all levels of government.
Kevin Toth is the president of Fox Harb’r Resorts and sits on the board of the Hotel Association of Nova Scotia. He says more communication from government is critical for the industry to survive.
“We’re looking for some meaningful partnership so there’s a glimmer at the end of the tunnel. Because looking into the abyss of the winter is pretty daunting,” Toth says.
Blood, Sweat, and Tears
That’s especially true for small hotel operators like Issmat Al-Akhali.
Al-Akhali owns and operates Granville Hall Student Residence in Halifax, a 30-unit hotel catering to travelers and tourists.
When Covid-19 first hit Nova Scotia he had to lay off his employees. Since then, he’s been running the show mostly on his own while enlisting help from his wife, who’s also looking after a toddler and a seven-month-old baby.
He stopped drawing a salary months ago to put all the money towards the hotel’s bills and he’s been living off CERB while he runs the business.
“Other than the financial difficulties of the tourism sector disappearing overnight, people like me have to struggle having to pick up all the slack if we decided to keep our businesses open. And then we have our families to look after as well,” he says.
Al-Akhali is an immigrant to Nova Scotia and says the business he’s been building for five years is his and his family’s lifeline.
“This is your own baby, your blood and sweat and tears built it, and it’s your own source of income, and with the economy the way it is there’s nobody hiring right now if I close it,” he says. “It’s a lifeline for me and my family if I can keep it open, but I can’t do it without assistance.”
Only Two Tourists Throughout The Entire Summer
Hotels, especially smaller ones like Granville Hall, make the bulk of their money during the busy tourist season. They typically operate at or near full capacity for most of the summer and use that profit to cover the slower winter season.
This year, those high-profit months didn’t happen, and hotel businesses are coming into slow season without their typical cushion.
On top of that, many of the programs designed to help businesses make it through the pandemic relied on deferring businesses’ bills. Now, those bills are also coming due.
Toth says having to pay months of built-up bills when you haven’t returned to full operations is tough enough—but add in months of continued costs with no cash coming in and you have a real crisis.
“If you’ve got a bit property tax bill sitting in front of you, and you’ve got payroll to make and you don’t have cash flow coming in, it’s a difficult thing,” he says.
Al-Akhili says he only had two tourists book a room at Granville Hall over the entire summer. He kept afloat by offering his rooms as long-term accommodations (at a significant discount), but at its peak, the hotel was only ever 60-70 percent full.
Industry-wide numbers for Nova Scotia look even worse. Across the province, hotels saw a 73 percent decline in the number of rooms sold this year. By the end of August, more than $99 million in revenue had been lost.
With the discounts he was forced to offer and his hotel’s low occupancy, Al-Akhili says his revenue was only half of his typical July and August. And that was up from “almost nothing” in May.
“But our bills are 100 percent: they weren’t forgiven, they were just deferred. And all of them are calling now,” he says.
‘We Need More Meaningful Engagement’
Toth says federal and provincial governments need to give some assistance to hotel operators if they want to avoid widespread closures. But where he really feels government is failing is in its communication with the industry.
Two weeks ago, the government promised specific help for the tourism industry in its throne speech. But so far, there have been no details about what that assistance will be, and when it will come.
“It’s great to have some support… but we need to get some meat on the bones so we understand if they’re actually going to help or how they’re going to help us so the hotel operators can plan accordingly,” Toth says.
“We need more meaningful engagement [and] we need to develop a much more meaningful strategy.”
Al-Akhali agrees.
“They define the problem very well, and they understand the problem very well, and that’s where it stops. They don’t really have any solutions for us,” he says. “There has been zero legislative or policy assistance from any level of government.”
The Atlantic Bubble is keeping most visitors out of the province, for example, but the government has not told the industry anything about if, or when, restrictions might be loosened.
Without that knowledge, he argues, how can operators plan for the future.
“They’re not giving us any light at the end of the tunnel where there maybe would be a reason to borrow money or keep the places that we have open,” he says.
Hibernation Assistence
Al-Akhil says he wants to see government offer businesses like his some kind of “hibernation assistance” that would let him shut down until he can expect a reasonable amount of customers again (likely at the beginning of next year’s tourist season).
“We are not going to get a tourism sector this winter,” he says. “We’re really looking for next summer at the earliest for any kind of revenue to happen.”
But with winter and the pandemic in full swing, accommodation providers will have a tough time making it that far. If help doesn’t come, Al-Akhil believes accommodations businesses across Halifax will go bankrupt and close.
He says the government can create programs “with some muscle behind it” that further defer loan payments, give operators a break on their utility and rent bills, and even give out non-repayable grants to make that happen.
Toth says he wants to see concrete plans from government that will help accommodation businesses start strong at the beginning of next year’s tourist season: things like marketing materials, incentive programs to kickstart the season, and maybe assistance in property taxation.
Until that happens, Al-Akhil says he will do whatever he can to keep his business open.
“We are really just going almost week-to-week here. We’re trying to see if next month we can make the bills, can we pay for this, can we pay for that,” he says.
He continues to run the hotel without drawing a salary, while his wife juggles looking after kids and hotel-related work like folding linens.
“We’re trying to make things work,” Al-Akhil says. “Hopefully we can.”