Vancouver is known as a top world destination for travelers and a leading host of unique event and meeting venues. With its strategic location on the West Coast, combined with its vibrant arts and entertainment scene, the city is an attractive location for both leisure and business travelers.
But with only 12 new hotels built in the last 20 years, Vancouver is facing a hotel shortage crisis, impacting overnight rates and the city’s ability to attract major events and accommodate growing visitor demand, especially during the busy summer season and cruise ship season.
Vancouver hotels are operating at near full capacity, with 80 per cent average annual occupancy and up to 95 per cent during peak seasons — well above rates in other major urban cities. The lack of new capacity makes it increasingly difficult to attract major conferences and marquee events.
In August 2024, Vancouver’s average daily hotel rate downtown hit $422, nearly double the Canadian average. Summer occupancy was more than 90 per cent, highlighting the urgent need for more supply.
According to a report by Destination Vancouver and the BC Hotel Association, 10,000 additional hotel rooms need to be built by 2050 to keep pace with demand. Without new investment, the lack of hotel capacity will translate into significant losses to the provincial economy. If the shortage is not addressed, the city and region as a whole could risk losing $30.6 billion in economic output, $16.6 billion in GDP, 168,000 full-time jobs, and $7.5 billion in tax revenue across all three levels of government.
The report is by the Vancouver Hotel Development Task Force, formed by the two organizations and other partners to take concrete action on the shortage issue.
“Vancouver has the same number of hotel rooms as we did 2002,” says Royce Chwin, president and CEO of Destination Vancouver. “Hotel development needs to be seen as a city-building tool. There is an opening to take swift action, otherwise capital will move wherever conditions are more favourable.”
Compounding the issue has been the 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 550 rooms from the city’s inventory, with purchases by BC Housing and the City of Vancouver to convert those rooms into supportive housing.
“This is about more than hotel rooms—it’s about building a vibrant, resilient city. Hotels are economic engines and social anchors,” says Ingrid Jarrett, co-chair of the Task Force with Chwin and the former CEO of the B.C. Hotel Association. “They support jobs, events, tourism, local businesses, and can enliven neighbourhoods.”
Market changes are resulting in renewed interest in hotel development in Vancouver which creates both opportunity and urgency to resolve Vancouver’s hotel shortage. Shifts in the real estate market—such as declining demand for office and strata developments—have created a rare window of opportunity for hotel development.
“We’re seeing unprecedented interest for investment in new hotel properties in Vancouver,” says 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.”
The report details five hotel development scenarios tailored to Vancouver’s neighbourhoods and market needs. The top two types of hotels Vancouver needs to address the room shortage are the “big brand,” a three- or four-star, full-service hotel with 200 to 300 rooms downtown or near transit hubs, and “the familiar,” which caters to working professionals seeking affordable, longer-term stays with kitchenettes.
Each scenario offers a scalable model to deliver a mix of price points, hotel types, and community benefits across the city. The five types are:
1. The Event Space: Large, luxury hotels with state-of-the-art meeting and event spaces.
2. The Big Brand: Large full-service hotels at an upper mid-market price point located near transit and attractions.
3. The Familiar: These are limited-service, extended-stay hotels in local commercial districts.
4. The Basics: Modern, budget-friendly options that cater to young people.
5. The Urban Resort: High-end, boutique hotels offering unique local experiences.
Although market demand is favourable for hotel development, there are major cost and regulatory challenges that may hinder the creation of new hotel supply. To overcome development barriers, the report outlines recommendations, including:
1. Deferring development charges.
2. Pre-zoning for hotel use in transit-oriented areas.
3. Creative solutions for parking and loading.
4. Pairing hotels with residential developments.
5. Building strategic partnerships to reduce risk and boost demand.
Vancouver City Council is addressing the city’s hotel room shortage by approving a new Hotel Development Policy in April. The amendments are aimed at encouraging the development of a diverse hotel supply and supporting Vancouver as a top tier destination for leisure and business travelers.
“Tourism plays a huge role in Vancouver’s economy, and having enough hotel rooms is key to bringing in major events and welcoming visitors from around the world,” says Mayor Ken Sim. “The updates council passed will help speed things up by making it easier to build more accommodations in Vancouver’s key commercial areas.”
The updated Hotel Policy includes significant measures to support the development of more hotels by:
• Encouraging hotel development in the Downtown Core and unlocking opportunities for hotel development in the Central Business District through time-limited relaxations of restrictions on mixed hotel-residential developments.
• Building on Broadway Plan updates approved in 2024, which allowed additional height and density for hotel developments.
• Allowing additional density for hotel developments on commercial high streets across Vancouver.
• Giving existing hotels the opportunity to renew and expand.
“Vancouver has consistently attracted interest from international hospitality brands and independent hoteliers, but we haven’t been able to fully capitalize on that potential,” says Chwin. “We’re fully in support of the city’s efforts to spur new hotel development and look forward to our continued collaboration.”
Despite opportunities and demand, without shovels already in the ground, it’s unlikely Vancouver will see any new hotels by 2025 to tackle the shortage of rooms.
Demand for rooms is expected to exceed supply in the summer months of 2026. The rest of Metro Vancouver will be short by summer 2028, and by 2040, the report shows year-round shortages across the entire region.
