A luxury hotel development in Nanaimo's downtown core will put "competitive pressure" on other hotels in the shortterm, but will ultimately spell good news for the market in the future, according to a consulting firm on Vancouver Island.
Nanaimo council unanimously approved a development permit and 10-year property tax exemption for a 21-storey, 240-room luxury hotel nestled beside the Vancouver Island Conference Centre at 100 Gordon St.
The proponent is SSS Manhao International Tourism Group, a subsidiary of Chinese tourism firm Suzhou Youth Travel Services Co, Ltd. The developer says the project will play to host to 70,000 tourists a year.
Frank Bourree, CEO of Victoria-based firm Chemistry Consulting, said the development will have little impact on the local market at first, but said investors are in the game for long-term results.
"There hasn't been a lot of new construction in Nanaimo for a long time, and this is actually really good news from the point of view of providing hotel rooms in conjunction with the conference centre," he said. "So, I think it's a very positive development for Nanaimo."
Bourree said there has been a 76 per cent increase in Chinese visits to B.C. since 2010, which has begun to rival tourism levels from the United Kingdom. "So this is fantastic news to have these linkages," Bourree added.
"We're at the tip of the iceberg in terms of potential for that Chinese market here." But he said people should not expect the new hotel to achieve "anywhere near" 90 per cent occupancy within its first year.
"Chinese investment has a little different, more long-term vision than Canadians or Americans that are investing," Bourree said. "They're going to here for the long-term, the long haul and they're going to build that market.
"It's not going to fill up immediately, and I don't think it's going to have a huge impact on the surrounding hotels, but certainly it will settle into the market over a few years." He said the project would "raise the bar" for other facilities in the region, which in turn will probably undertake upgrades. Bourree said other hotels could benefit from "spillover" business from increased activity at the VICC.
Mayor John Ruttan said the success of the project will depend on ensuring that the tens of thousands people expected to visit the hotel each year have a convenient, quick way to travel to the city, and said a proposed fast ferry foot passenger service between Nanaimo and Vancouver could fit the bill.
"I'm just saying it would be a great asset to the conference centre hotel to have that service," he said, adding there is still some time to establish a service before the hotel is built. Nanaimo Economic Development Corporation CEO Sasha Angus said ferry proponents are in the final stages of financial due diligence with two different Chinese investors. Two ferries have also been secured, he added.
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