The accommodation industry provides lodging or short-term housing to travellers and other people who are temporarily away from their usual residence. These accommodations can be rented on a short-term basis or for longer periods. Traveller accommodation includes hotels, motels, ski resorts, lodges, bed and breakfasts, hostels, tourist cabins, and other types of lodging. Recreational accommodation, such as hunting and fishing camps, children's camps, guest ranches, campgrounds, and RV parks are also part of this industry, as are boarding houses, dormitories, and work camps (which house and feed workers at job sites in remote locations where other types of accommodation are not readily available).
Hotels, motels, lodges, and resorts may offer both accommodation and food services, since many have a restaurant, bar, or café onsite. Someone who works for a restaurant operated by a hotel is considered to be employed by the accommodation industry, because the main activity of the hotel is to provide lodging services to its guests. However, if the restaurant in the hotel is leased to another business, then the restaurant worker would be considered to be employed in the food service industry.
In BC, hotels generated about 63% of their revenues from room rentals in 20058, with a significant share coming from sales of meals (17%) or alcohol (10%). Other sources of revenue included merchandise sales (1%) and services such as laundry, telephone, parking, entertainment, recreation, or transportation (9%).
Motels derived a much bigger share (84%) of their revenues from room rentals. Meals (5%), alcohol sales (6%) and sales of services (4%) were less significant sources of revenue for motels.
For other types of accommodation (lodges, guest houses and so on), package vacations, which can include everything from accommodation and meals to the cost of transportation, guides and sporting equipment, account for about 60% of total revenues.
Changes in the accommodation industry
The province's accommodation industry has seen some large-scale changes in recent years. At one end of the spectrum, a number of large hotels have been built to meet the growing demand for accommodation services in places like Whistler, where there are many high-end accommodations. At the other end of the spectrum, bed & breakfasts (B&Bs;) are becoming an increasingly popular option for travellers who prefer more personalized service when they are away from home.
Hotels account for three quarters of total room revenues in the province, a ratio that has remained stable during the last decade. About 12% of revenues are earned by motels. However, other types of accommodation services are gaining ground. In particular, B&Bs;, resorts, and vacation rentals have seen strong growth during the last few years, with room revenues more than doubling during the ten-year period ending in 2008. These accommodations now generate about 14% of total room revenues.
B&Bs;, vacation rentals and other non-standard accommodations are becoming more popular with travellers
About vacation rentals
There's a growing segment of the market that doesn't provide traditional types of accommodation. Some condo or home owners are offering their units for rent to travellers when they do not need them for their own personal use.
The owner benefits from the extra income, while travellers are able to stay in a self-contained, fully-equipped apartment or house instead of in more traditional types of accommodation. These arrangements are often made through agents who keep a list of properties that are available for vacation rentals. Vacation rentals are especially popular in resort areas, but are found throughout the province.
Other arrangements that are growing in popularity include time-share packages (where people pay a fee to become part-owners of a group of properties, at which they can stay for a limited period each year), and condo-type ownership of hotels and other properties.
What's happened since 1990?
The accommodation & food services industry has faced some challenges during the last decade, as economic and other factors have affected travel to the province. Spending on food and accommodation services is discretionary. People normally have a choice as to whether or not they purchase these items. They are more likely to travel or eat out when times are good, and they feel confident about the future.
During economic downturns, these expenditures are often reduced. When times are tough, housing, utilities, clothing, school supplies, and groceries are still needed, but restaurant meals and travel are not usually considered essential. It's possible to reduce spending by eating at home, or choosing less expensive options such as take-out or fast foods and having meals at family restaurants rather than at upscale restaurants. Those wanting a vacation or weekend away might decide to go camping or visit family and friends rather than staying at a hotel in a large city.
Because it's relatively easy to reduce these expenditures, the accommodation & food services industry usually feels the pinch during periods of slower growth. The accommodation & food services industry serves customers from all over the world, and this means that economic slowdowns in any key tourism markets can affect the industry in BC.
The accommodation industry primarily serves tourists, whether they are British Columbians travelling inside the province, visitors from other parts of Canada, or travellers from other countries. The food services industry mainly serves local residents, but has a significant tourism component as well. It's estimated that three out of every four dollars spent in restaurants come from local patrons, while tourists or business travellers account for about a quarter of these expenditures.
Visitor entries from the US have dropped significantly since 2000
This dependence on tourist dollars means that the industry is not only affected by local conditions, but also by the economic situation in the rest of Canada, the US and overseas. An economic boom, or slowdown, in another part of the world can have an effect on this industry. For example, travel to BC from Asia dropped off significantly in 1997, when many Asian economies were in a slump. The effect of the so-called "Asian flu" is evident in Figure 27, which shows a noticeable drop in entries from countries other than the US in 1997. Visits from Asia have since recovered, but the rate of growth has been much slower than it was in the past.
Economics isn't the only factor that influences travel plans. The terrorist attacks of September 11, 2001 came at a time when US and Canadian economic growth was slowing. The number of travellers visiting BC from the US, a major tourism market for the province9, had already begun to decline in early 2001, but plummeted in the wake of the attacks. It has continued to decline since then.
There are many reasons for the long-run decline in entries from the US. These include the value of the dollar, rising gas prices and more recently, the economic situation in the United States. One other factor that may have played a role is tougher security measures at the border, which make it more time-consuming and inconvenient to travel between Canada and the US. This has almost certainly affected same-day travel from the US, which is now well below 1990 levels. While overnight travel from the US has not fallen as much, it remains on a downward path as well. With fewer Americans coming to BC, there is less demand for accommodation, food and other services typically purchased by these travellers.
The industry was hit by another shock in 2003, when an outbreak of SARS (sudden acute respiratory syndrome) resulted in the cancellation or postponement of some planned visits from Asia, another important source of visitors10 to BC. Entries from Asia dropped significantly in 2003, and remain below pre-SARS levels.
Despite all these factors, the demand for accommodation services in the province has continued to increase, partly due to tourism from other countries, and partly because British Columbians and other Canadians are also consumers of accommodation services. In fact, industry revenues, and real GDP, have been rising. However, the number of jobs in accommodation has changed only marginally since 1990.
Employment in accommodation has changed only marginally since 1990, but there are a lot more jobs in food services
In contrast, employment in the province‘s food services industry has grown much more rapidly than its revenues and GDP. In other words, slow job growth in the accommodation sector has dampened overall employment gains (but not GDP growth) in the industry as a whole.
Nearly 8% of the BC workforce is employed in the accommodation & food services industry
Over the longer term, job growth in accommodation & food services has been more volatile than in other industries. The industry currently employs almost 8% of the BC workforce, slightly more than its share of total employment in 1990. However, its share of total GDP has dropped from nearly 4% to just over 3%.
The wide gap between the industry's GDP and employment shares reflects the fact that accommodation & food services is an extremely labour-intensive industry. You can't prepare and serve meals, or offer accommodation services, without employing a lot of staff. However, many of the people working in the industry have part-time jobs, and receive low hourly wages, so employment levels don't necessarily indicate the actual amount of labour that's used by the industry.
What are the most common occupations?
Almost all of the workers in this industry are in sales & service (82%) or management (14%) positions. Eight out of 10 workers are in sales & service occupations. Food and beverage servers make up 19% of the total workforce, with a similar percentage employed at food-service counters (19%). Cooks (14%), cashiers (5%), and chefs (5%) are other common sales & service occupations. Other typical occupations in this group include light duty cleaners (4%), bartenders (3%), and maitres d'hotel and hosts (3%). Fourteen percent of the workers in this industry are restaurant, accommodation and other managers.
Eight out of 10 workers are employed in sales and service occupations
How many people work in accommodation & food services, and how much do they earn?
The accommodation & food services industry employed 178,100 people in 2008. Eight out of 10 worked in the food & beverage services industry.
Wages in accommodation & food services are lower than in any other industry
Hourly wage rates in the industry are quite low, averaging $13.00 an hour in 2008, $8.46 less than the average for all industries in the province, and lower than in any other industry. Wages averaged $12.14 an hour in food services and drinking places. Workers in accommodation services received an average hourly wage of $16.36. The typical worker spent 31 hours a week on the job in 2008.
Although wages in accommodation & food services are well below the levels seen in other industries, workers usually supplement their earnings with tips received from customers. A standard tip is usually between 10% and 20% of the bill, so some food and beverage service workers derive more of their income from this source than from the wages that they're paid by their employers.
What are the characteristics of the workforce?
Part-time employment is more common in this industry than in any other industry group. Almost 40% of workers were employed part time in 2008. The only industry with a comparably large part-time workforce was retail trade, where the rate was 31%.
Seasonal variations in employment are quite pronounced in this industry. Employment is lowest in the winter months, then builds up to a peak in the summer, when more people are travelling, before dipping in the fall. In addition to tourist activity, summer is also a popular time for weddings and other gatherings which are often celebrated at hotels or restaurants.
Employment in the industry usually peaks during the summer months, and picks up at the end of the year
Similarly, restaurants and hotels are often busy in December, with many Christmas and New Years' parties held at these venues. As well, travel during the winter holidays is quite common, and this boosts the demand for accommodation and food services at that time of year.
Given the highly seasonal nature of this industry, temporary employment is quite common. About 15% of the workers are employed on a temporary rather than permanent basis.
Unionization is not common: only 8% of the workers in accommodation & food services have union coverage. The average for all industries is 31%.
The workforce is largely female, with women holding three out of every five jobs. They make up less than half (47%) the total workforce.
The unemployment rate in accommodation & food services is usually similar to the all-industry average
Unemployment rates in this industry averaged 7.9% during the period from 1990 to 2008, virtually the same as the rate (7.8%) for all industries. However, workers in this industry are more likely to experience unemployment than other service-sector workers. The jobless rate in the service sector averaged 4.8% during this period.
Small, independently owned and operated restaurants are found throughout the province. In the accommodation industry, trailer parks, campgrounds, lodging houses, lodges, B&Bs;, and vacation camps are often owner-operated.
However, only 9% of the workers in this industry are self-employed, compared to 19% for the province as a whole. One reason for this difference is that it takes many people to operate a typical restaurant or accommodation property, including those that are owner-operated. Ten percent of workers in the accommodation industry, and 9% of those employed in food services & drinking places, are self-employed.
Small establishments are more common in this industry than in the economy as a whole. Forty-four percent of all employees work in small establishments, with fewer than 20 co-workers. A similar number have jobs at establishments with between 20 and 99 employees. There are comparatively few people working at establishments with more than 500 employees.
Most people who work in the industry are employed at small establishments
Where are the jobs located?
Vancouver Island/Coast and Thompson-Okanagan have higher-than-average shares of jobs in this industry
To some degree, the demand for accommodation & food services is related to the size of the population living in an area. However, hotels, motels and other types of accommodation are frequently located at or near popular tourist sites that may be outside urban areas. For example, there are several large hotels in the Whistler area, which have been built to accommodate skiers, snowboarders, golfers and tourists visiting the resort town. Other resorts are located near ski slopes, hot springs and other popular vacation sites in the Interior, and fishing or hunting lodges, guest ranches, and similar types of accommodation may be found in rural or wilderness areas.
Thompson-Okanagan accounts for a slightly larger than average share of total employment in this industry. With its scenic beauty, orchards, wineries, and varied outdoor recreation opportunities, the region is a popular spot for tourists. It's also a frequent stopping point for travellers who are either driving or taking the train between Vancouver and Calgary, since it is a relatively easy drive from either city. The route through the mountains is popular. Many visitors to the province-from overseas and from other parts of the country-choose to drive or travel by train or bus through the mountains in order to experience the beauty of the Canadian Rockies.
Vancouver Island/Coast is also popular with tourists from North America and overseas, who often include a visit to Victoria, the Gulf Islands, Long Beach, or other parts of the region in their travel itineraries. Famous hotels such as the Empress, a historic railway hotel located in Victoria, are tourist attractions in their own right.
What's the outlook to 2017?
Employment in the accommodation & food services industry is expected to grow at about the same rate as in the rest of the economy during the next few years. The industry is expected to employ nearly 8% of BC workers by 2017. Its share of total GDP is expected to be just over 3% in 2017.
GDP in accommodation & food services is expected to grow a little faster than the rest of the economy during the next few years