Why are hotel rooms so expensive in Toronto?

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Why are hotel rooms so expensive in Toronto?

Hotel room prices are rising in Toronto.

Despite the end of the summer season, hotel room prices in Toronto remain high. The situation is explained by a great demand for accommodation due to the continuous presence of visitors in the Queen City, according to experts.

The conditions are met for a perfect storm, says Ryan Killeen, chief operating officer at the Annex Hotel in Toronto.

The rise in hotel room prices is explained by several factors, such as the return to normal for leisure and business tourists, he adds.

This is an upsurge in tourism that started this summer and continues into the fall.

“Rising prices in hotels, it's a way to make up for lost time.

— Ryan Killeen, Chief Operating Officer, Annex Hotel Toronto

Adding to the reasons for price increases, according to Killeen, is inflation. The main factor relates to supply and demand.

The market is very competitive, he says. If competitors rent their hotel rooms for $500 or $600 per night, with high occupancy, the Toronto market will follow.

According to Frédéric Dimanche, Director of the x27;Ted Rogers School of Tourism and Hospitality Management at Metropolitan University of Toronto, it's a good sign that prices remain high.

Frédéric Dimanche is Director of the Ted Rogers School of Tourism and Hospitality Management at Metropolitan University of Toronto.

It means that tourism is returning to normal; we should certainly not complain about it, notes the professor.

“The hoteliers are happy to bring in the money!” They had empty coffers for two years and the financial pressure was hard on them.

— Frédéric Dimanche, Director of the Ted Rogers School of Tourism and Hospitality Management at Metropolitan University of Toronto

Even his from the side of Andrew Weir, vice-president of the tourism organization Destination Toronto.

It's encouraging to see an increase in demand in the hotel sector, especially because tourists have chosen to avoid major centers during the pandemic, he explains.

The continued rise in hotel room prices may also limit access to major urban centers like Toronto for some tourists, according to Professor Frédéric Dimanche.

Toronto should attract a diverse clientele, like the city, which enjoys great socio-economic diversity, he says.

According to him, there is renewed interest in hotels on the outskirts of major centers due to this lack of accessibility.

For his part, the president of the x27;Ontario Restaurant Hotel & Motel Association, Tony Elenis, finds that the Queen City lacks affordable hotels.

“The lack of budget hotels in Toronto itself gives the impression that the prices are higher than they really are. »

— Tony Elenis, President of the Ontario Restaurant Hotel & Motel Association

There is a lack of discount hotels in Toronto because it is too expensive to operate a hotel in Toronto. This lack of supply is pushing tourists to seek their accommodations in the Greater Toronto Area, outside of downtown, he explains.

Moreover, this price increase for hotel rooms in Toronto comes at a time when there is a reduction in the quality of the service offer in the hotel sector.

With the shortage of labor and the strong comeback of tourism, the hotel sector is facing difficulties related to the quality of services. We don't have enough employees and those we have are not sufficiently qualified, explains Frédéric Dimanche.

“Visitors are willing to pay more for hotel services, but if they find that the quality is not up to par, they may change their minds.

— Frédéric Dimanche, Director of the Ted Rogers School of Tourism and Hospitality Management at Metropolitan University of Toronto

Professor wonders if consumers will get used to lower quality service because of this lack of skilled workers.

According to him, the answer will come in the next few months.

With information from CBC

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