Calgary lodges to see 23 per cent enhance in assessed values

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It’s a much less drastic enhance than initially anticipated, however Calgary’s lodge operators may nonetheless really feel some shock once they open their property evaluation notices this month.

After beforehand indicating that lodge properties’ values might be as a lot as 42 per cent greater in 2024 than the 12 months earlier than, metropolis assessor Eddie Lee stated Wednesday the rise needs to be nearer to 23 per cent.

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In early November, when presenting town’s preliminary tax roll evaluation to metropolis council, Lee stated the mixed assessed values of Calgary’s 108 lodges and motels had shot as much as $1.18 billion in 2023 — up from $832 million the 12 months earlier than‚ a 42 per cent hike.

“Lodge and motel market worth assessments are steadily rising, with occupancy, common day by day charge and income per out there room exhibiting enhancements over the earlier 12 months,” said a Nov. 1, 2023, report back to metropolis council’s govt committee.

“This implies important market worth will increase within the lodging sector, with two-thirds of the lodges approaching pre-pandemic market values and the rest surpassing pre-pandemic market values.”

The ensuing valuations would have resulted in important property tax will increase for lodge house owners this 12 months, with hoteliers taking up extra of town’s tax load.

However at a media availability Wednesday, Lee stated metropolis employees had been in a position to collect extra earnings info from lodge property house owners throughout the pre-roll session interval, which has led to a decrease enhance.

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“After we introduced our preliminary info, extra lodge house owners got here forth with among the earnings info that they had on their properties,” Lee stated. “With that new info, the assessments we mailed out at present mirror that.”

Regardless that Calgary’s lodge sector has largely rebounded from the pandemic, Lee stated property valuations are nonetheless decrease now than throughout the pre-pandemic period.

“Motels have nonetheless been negatively affected, however there’s positively optimism,” he stated. “They did have a kind of banner restoration 12 months in 2023 that had helped drive these values up. It’s nonetheless a major enhance.”

On account of the upper assessed values, Lee stated lodge house owners’ property tax will increase “can be comparable” this 12 months.

In whole, town’s non-residential property market worth elevated by three per cent in 2023.

‘It’s forecasted to be fairly flat’

Nonetheless, lodge trade representatives say a property tax hike north of 20 per cent may have important results on lodges’ operations.

Sol Zia, govt director of the Calgary Lodge Affiliation, stated the native group appreciates the decrease assessments from the estimates in November, however nonetheless feels the values are too excessive.

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Whereas native lodges did expertise improved financial situations final 12 months, Zia argued the sector is anticipating a comparatively flat 12 months in 2024 in comparison with 2023.

He additionally expects the elevated property assessments can be uneven for Calgary lodges this 12 months.

“I feel some lodges can be happy with the assessments, however I additionally suppose a big quantity will nonetheless be outraged, particularly those that have charge will increase higher than 30 per cent,” he stated.

Karim Ismail, space director of operations for First Canadian Administration Corp. — which owns and manages lodges throughout Canada — stated hoteliers might want to attempt to recoup the price of greater taxes elsewhere. That might imply reducing staff’ hours or shedding employees.

Ismail stated lodge operators are additionally grappling with greater utilities, insurance coverage, meals and labour prices.

“Anytime there’s a major (tax) enhance of that magnitude, it’s going to lead to hoteliers and operators making an attempt to cut back prices,” he stated. “The very first thing one would have a look at is, what’s your variable value? That turns into labour. Now we’re making an attempt to pay town on the expense of letting somebody go or lowering hours.”

Ismail argued that 2023 was a “one-off” 12 months, by way of the hospitality and tourism sectors’ rebound, attributable to pent-up demand from the pandemic. Regardless of some large-scale occasions on the horizon and the upcoming completion of the BMO Centre later this 12 months, he doesn’t anticipate the identical income development for Calgary’s lodges in 2024.

“It’s forecasted to be fairly flat,” he stated.

— With information from Chris Varcoe

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