ORHMA Holds Inaugural Conference in Toronto
Article Published November 7, 2022
Article Source: ORHMA Holds Inaugural Conference in Toronto - Foodservice and Hospitality Magazine
TORONTO — The inaugural Ontario Hospitality Conference took place last week at the Westin Toronto Airport Hotel. Presented by the Ontario Restaurant Hotel & Motel Association (ORHMA), the event for owners and key management brought together foodservice and accommodation leaders to connect with industry peers and gain insights into key industry issues.
“We are thrilled to host the inaugural Ontario hospitality conference, presenting today’s topics that keep us up at night and providing valuable takeaways,” said ORHMA president & CEO Tony Elenis in his opening address. “Ontario, this is your event. Thank you for joining us.”
The morning kicked off with a State of the Hospitality Industry session presented by Robert Carter from StratonHunter Group and Emile Gourieux of STR, who offered insight and data about the current foodservice and hotel landscapes, as well as a future outlook and tips on how to navigate it.
“The industry is still challenged,” said Carter. “We’ve gone through a dramatic change and we haven’t fully recovered. We know the supply-chain challenges; we know the labour challenges; we know consumers are different today than they were in 2019; and we know that the business model for restaurants and foodservice has changed dramatically.”
According to Carter, there’s resilience in the marketplace and “nothing is impossible.” This attitude, he said, spurred innovation that then spurred changes in the business model, causing operators to look at how they can do things differently. “This has created great opportunities and will continue to create opportunities in the market moving forward,” he said, adding consumer expectations have changed and diners are more focused on understanding the types of foods they’re eating. “This is a great opportunity for foodservice — both hotel and within the commercial restaurant segment.”
He wrapped up by saying inflation will likely have “a mild impact” on the foodservice industry, particularly commercial restaurants segment. “When we look at the marketplace, and what we can expect as we move into 2023, we’re expecting growth of about a billion dollars in commercial foodservice. But with 100,000 different operators right across Canada, this is going to be a steal-share game.”
Carter then passed the microphone to Gourieux, who provided a snapshot of the hotel landscape in Canada. “With the onset of COVID, and the closure of the Canada-U.S. border, we saw room demand just come crashing down to right around 300,000 room nights a week in mid-April. And then domestic travel here in Canada helped push those numbers up over the summer. But it was really nothing like a normal Canadian summer.”
He presented historical data from 2019 and compared it to market performance during the pandemic. He then presented STR’s analysis of the current market conditions as well as what the industry should expect moving forward.
“Long story short, more people are travelling this year than they were last year. That’s what seen in our hotel data, but it’s certainly supported by everything that we see in [our traveller sentiment] survey as well. Overall, 86 per cent of those people polled have either undertaken travel so far this year, or at least booked a trip so far this year, compared to 68 per cent for the same time last year.”
He said STR’s forecast is showing an increase in occupancy, although it’s the Average Daily Rate that’s really going to drive recovery. With that in mind, STR has revised its forecast for Canada “to where we’re seeing full recovery, with RevPAR of $107, just like we had in 2019. We have to take inflation into account here, it’s what I’ll call a nominal recovery, meaning while the numbers are the same at $107, when adjusted for inflation, we’re still not where we need to be. But as we get into 2023, by the end of next year, occupancy is going to only be half a point off of what it was in 2019 and rates are going to continue to grow. That will be our year of true recovery for Canadian hotels, more specifically here in Ontario.”
Re-inventing Talent – Recruit, Retain, Re-train
The next session, moderated by Joe Baker of Joe Baker & Co./ORHMA, brought together a panel of experts with direct experience in this field to share their views and strategies and to highlight approaches operators can implement to improve their practices in terms of staffing and leadership.
Speakers included Jane Yrenaya of Franklin Covey, Philip Mondor from Tourism HR Canada, chef Andrea Nicholson of Butchies INC. and Jeff St. Denis of Culture Catalyst.
Mondor set the stage for the discussion with insight into the challenge of labour supply versus the labour demand. He stated that currently, Ontario holds the lion’s share when it comes to staff shortages across all segments of the hospitality industry.
“The bigger challenges we’re facing are actually at the management and operational level,” he shared. “We’ve seen the largest retirement rate and drop-off rate of people at the operational and management level than we’ve tracked in the last 30 years — and they’re not coming back. They’ve migrated to other sectors or they’ve moved into retirement mode, or they’ve moved into consultancy activity and other kinds of work.”
The conversation then shifted to the role leadership development and leadership training plays in retaining talent given the current struggles.
“People want to make an impact and feel valued,” said Yrenaya. “Throughout my career, what I’ve observed is that when people feel that, it extends into the guest experience quite naturally.” And that, she says, starts at the top.
That’s something Nicholson has taken to heart in her restaurant, which struggles to maintain staffing levels.
“Right now, we have an amazing core staff that I rely on, and I treat them really well. A living wage is crucial nowadays, so we pay above a living wage and we provide benefits and incentives for our staff. But most of all, we provide a culture, and that’s been really important, through diversity and inclusion. And when any of my hiring managers hire new staff, it’s first about attitude and accountability, because we’re nothing if an employee doesn’t have accountability.”
The panel then addressed the issue of diversity and inclusion in the hospitality industry, with St. Denis observing that “there’s nothing like a great crisis for us to really think about how we can look at diversity in a more nuanced way, in a way that really emphasizes belonging.”
He says the industry has gone from the age of inequality, which is treating people like machines, to the age of equality where everyone is treated the same (‘just bring yourself to work and leave your identity at the door”). But now, he said, we’ve transitioned to the age of equity, where we all have unique needs.
“We also see how creating an inclusive work environment has real tangible benefits,” said St. Denis. “It’s not just about doing the right thing, although that’s also a great thing, but also, we see that companies who manage diversity are able to retain their workers, are able to attract more workers, and are able to report a higher EBITDA.”
Cost of Doing Business
Experts from the worlds of insurance, energy, borrowing and property tax came together to discuss how these elements of business needs have caused common and widespread frustrations over the past years in terms of cost escalation. And with these challenges are expected to continue, they offered updated information to help operators make decisions and examine options.
Moderated by Dr. Altaf Sovani of Alzen Consulting Inc., panellists included Paul Weingartner from ECNG Energy Group; Cameron Woof from CWB Franchise Finance; Jason Crane of Altus Group; and Jason Wiesner from Western Financial Group.
“What most people are interested in right now is the reality of our current interest-rate environment and where we sit,” said Woof. “The quick answer is interest rates are high, and they are increasing. However, put into context, what we’re experiencing now is actually not as bad as it could be. And I don’t expect it to be as bad as it could be. Over the last 10 years we’ve been drunk on debt on very low interest rates, which is highly unusual if you look into the history of interest rates in Canada and the world at large. So, as we move into this kind of new phase coming out of the pandemic, and other challenges such as supply-chain issues and labour issues, it definitely doesn’t seem very good. A lot of things are happening at once, but in the long term, our industry is a good one.”
Weingartner provided an overview of trends in energy pricing and highlighted some of the challenges operators are going to face in this regard. “The biggest challenge we’re going to face here in North America, especially on the natural-gas front, is that while other countries and continents flight for cheap [supply] — and we do have the cheapest natural gas in the world — it’s going to start to increase the cost.” Electricity, on the other hand, is coming down, he added. “We’re probably at one of the cheapest rates of electricity that we’ve seen in a decade or so. That said, we are expecting to increase to levels very similar to what we’ve seen in the past 10 years. So, there’s quite a bit of movement.”
Crane then addressed the property-tax component, saying ORHMA’s efforts to have the government lower the business- education tax, which is basically half of the property tax, means a lot of property owners and operators in the space have seen their property taxes be flat, or even decrease as a result of shifts in assessment.
“The bigger issue is that at the height of the pandemic, when a lot of your costs would have been decreasing and when there was a lot of government programs to help with other parts of the business, there was nothing on the property-tax front,” said Crane. “Our clients found that frustrating. There still has been nothing and the Assessment Review Board, where we file our appeals, have rebuffed our efforts so far — some of them have been exhausted and some of them are still open. But if there is a win, it’ll be down the road.”
For coverage of the afternoon sessions at the 2022 Ontario Hospitality Conference, watch for our Wednesday edition of Hospitality Headlines.