Nanaimo hoteliers raise red flags over VICC report

At Monday’s council meeting Nanaimo hoteliers contested the data in the VICC hotel feasibility study prepared by CBRE  Hotels.  The City of Nanaimo is using CBRE, an international hotel brokerage company, to sell 100 Gordon Street, the proposed site of a future conference centre hotel for VICC (Vancouver Island Conference Centre).

VICC is costing taxpayers approximately $2.5 million every year. It costs $1.5 million to run it and over $1 million to service its debt.

100 Gordon Street - potential site of conference centre hotel (adjacent to No. 1 mine shaft)
100 Gordon Street – potential site of conference centre hotel (adjacent to No. 1 mine shaft)

Should there be a conference centre hotel?

Most of the CBRE presentation was by telephone with accompanying slides. The presenter started off with a bit of background information about VICC including the fact that it is privately managed yet publicly owned.  VICC is considered a tier 3 conference centre as compared to the Vancouver conference center which is a tier 1.

Here is a collection of points made by CBRE:

  • Most comparable Tier 3 conference centres in Canada cost taxpayers around $800,000 per year. VICC costs over $1 million per year.

It is going to take more than an adjacent hotel to realize the potential of VICC – CBRE Hotels

“We need to fill the sales manager position at the conference centre which has been vacant for some time.”

“There is no planning or connection between Nanaimo tourism and the VICC…To realize any potential that has to be addressed…”

  • According to VICC figures, in 2015 there were 21 conventions and 2 trade shows held over 53 days.
  • Revenue generated in 2015 was $1.9 million with costs of $1.2 million to operate VICC.

“If these convention centres were money makers then the private sector would be building them…they are like loss leaders… the upside is it brings people to the city…they spend on average $141 per person…”

Currently there are three proposed hotels for Nanaimo:

  1. Insight Holdings Waterfront Hotel at 28 Front Street – 32 storey 303 rooms
  2. Howard Johnson Hotels Multiplex at 1 Terminal Avenue – 6 storey hotel 160 rooms
  3. VICC Hotel at 200 Gordon Street – 150 rooms

The VICC is hoping to have a conference hotel built by 2019.

Nanaimo Hoteliers protest numbers

Following the CBRE presentation, three hotel operators/owners lined up to speak. One of their major concerns was why can’t the VICC release its numbers so they can be checked out. According to industry practice, when there is a conference, the VICC is supposed to put out an RFP to all interested hotels so they can put out a proposal.

Hotelier #2:

…In 2015 we had 5 bids!…Most other hotels didn’t have any…We need to know the real numbers…We just can’t have this as a guessing game…No one has sat down and said we are going to lose a convention if we can’t get the rooms…You’re telling people our current hotels aren’t good enough yet you’re using our hotel stays in your report. It’s a bit of a slap! …How much of your business is local? How much did VICC take away from us? …I have the numbers if you want…You guys [want to undercut prices from other local hotels]

“I have been in the hotel business for 25 years…if these numbers of 14,000 hotel nights are right [I’ll eat my shirt]

Your convention centre is supposed to sell guest rooms NOT to take away business from local hoteliers. You’re not going to make money but…help the local enconomy…we have local hotels competing with the convention centre for meetings with 150 people and less…local meetings are not your business…

Delegate days are conferences that are multi-day events; not local one day meetings.

Feb 2016:  there were 7 city functions, 24 local functions. You counted those local functions as delegate days in your calculations [in order to prop up revenue numbers so they were greater than 2 million]

Please don’t make us have a fifth meeting on this…we want to work with you and VICC…Please don’t embarrass us by saying we don’t have enough good hotel rooms when most of your business is NOT conventions.. I can’t wait for the first person to ask me, ‘are those numbers accurate?’ [me: I don’t think so.]

Hotelier #3:

We have not received one RFP from the conference centre in years…and to tell business that conferences have been lost because of lack of available hotel rooms [is bullshit]. Our rooms are sitting empty; where are those delegates needing the rooms? Get us the truth behind these numbers.

…Show us some respect…We have made several attempts to make our concerns and this is our last attempt.

Councillor Pratt: …your hotel is a long way from here [VICC]

hotelier #3: 12 minutes

Pratt: Delegates are looking for something close to the conference centre…If there were more hotels on the level of the Coast Bastion then that would be better…

hotelier #2: …When was the last time you Councillors went to visit local hotels? They’ve done renovations [Buccaneer Inn, Best Western North Nanaimo, Inn on Long Lake…] Worried about transportation? Use your imagination…we have solutions..

hotelier #3: We haven’t had one RFP from VICC in years…several years ago we did a shuttle service to our hotel and it worked…

Pratt: I totally agree with you, if the numbers are wrong we shouldn’t be using this report…

Councillor Thorpe: …you don’t want another hotel?

hotelier #1: …We didn’t say that…we just want someone to look at the numbers. We don’t trust the numbers…

Thorpe: You don’t see a need for the conference centre hotel?

hotelier #1: …not based on those inflated numbers

Councillor Kipp: …What we spend is real…These projections are based on erroneous figures…a VICC hotel couldn’t make it. What are the barriers to collaboration between VICC, tourism and the hoteliers? I was under the impression we had spent $900,000 promoting the VICC…

Councillor Fuller: We’ve never reached more than 5% capacity for the VICC, that’s it.

Pratt: …if the 14,000 overnight stays aren’t accurate then…We need to find why the report is saying something grossly different.

hotelier #2: …more businesses are closing [so how can the delegate spends be accurate?]

hotelier #1: If the VICC shared their numbers with us… we could build a database…

Pratt: …there should be a motion – refer this study back to staff and see whether we should actively pursue a hotel for the VICC…

Fuller: …you have two groups saying two different things…we need a stronger motion…

CAO: …we’ll tell the CBRE consultant to simplify the report so the layperson can understand…

Thorpe: I’m a fan of a new hotel…get the report revised…

Councillor Hong: I could poke holes through this report all day long… We’re stuck with this place (VICC)…we’re losing money on it…break this report up… A projection of 1.7 million profit? This is nuts. Give them the facts not the fluff. I want to see something on 100 Gordon Street…if I’m going to build a $30 million hotel, I’m not going to listen to the crap in this report…

Fuller: …have this report revised to clarify data sources, with discussion from the Nanaimo Hotel Association and the CBRE consultant…

Kipp: …we spent $100,000 a month trying to market the Millennium Project and the people who were going to build a hotel there…we gave out condo sites and air space…I want verification with the industry. Nobody wants to work together… send the report back…I’m tiring of reports like this…

Mayor McKay: …This was a report to present to purchasers of 100 Gordon Street… I want to make sure we won’t be liable for misinformation. I can’t support Fuller’s motion… maybe all the delegates stayed at the Living Forest (campground)…

Fuller: makes another attempt at motion…scribble scribble

Councillor Brennan: [like I said before] clarify and verify!! [this report]…

Councillor Fuller withdrew his motion and Councillor Brennan made up a new one which basically meant to send it back to CBRE to get some verification on where they got their numbers. The motion was passed unanimously. (Councillors Yoachim and Bestwick were absent from the meeting).

Mayor McKay’s joke about the convention delegates staying at the Living Forest Campground raises a relevant point.

If there were in fact 12,000 overnight stays which weren’t in any of Nanaimo’s hotel rooms, then did they stay at Airbnbs? Or did the VICC submit those numbers just to entice a potential hotel builder?

Who would consider putting a hotel right next to a two mile hole which is the Number One mine shaft? Why is the City of Nanaimo not concerned about liability over this site?

One thought on “Nanaimo hoteliers raise red flags over VICC report

  1. Why doesn’t the city monitor what is a legitimate hotel and stop the shady practice of business licences being given out to hotel managers in error. I live in a place that states a hotel and it should not be but the city does nothing and allows it. There needs to be compliant regulations on running hotels Vrbo and air bad and b in this town. Quit fighting and get down to business. Our taxes are ridiculous for nothing

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