Star: High End Hotel Projects Aiming for the Stars
From the Star, business section:
High-end hotel projects are aiming for the stars
Four uber-hotels slated to be built in Toronto
But 5-rating can't be bought —it must be earned
Jun. 5, 2006. 01:00 AM
DONOVAN VINCENT
CITY HALL BUREAU
There are, believe it or not, people who come to Toronto for business, or just to visit, but who refuse to stay overnight.
Why?
Because there aren't, by their standards, any five-star hotels in the city.
And though some of us might say to heck with those hard to please travellers, four aspiring five-star hotel projects, all slated for completion in the next three to four years, have been approved by the city and are currently in the works, all in a bid to cater to that finicky, well-heeled set.
The latest to get the nod, the nearly $400 million "Shangri-La'' tower — named after the popular Asian-based hotel operator the developer is trying to lure — was approved by city council May 25 and is set to be built at University Ave. and Adelaide St. W.
The others are the recently approved Four Seasons hotel in Yorkville, The Ritz Carlton, which is slated for Wellington St. and the Trump tower, planned for Bay and Adelaide. All are hotel/condo buildings.
Those behind the projects are racing to get their shovels in the ground first, amid the building boom currently underway in the city's core. One reason for the eagerness is that studies are showing steady growth in demand for luxury hotel accommodation, say experts.
There are various national and international hotel rating systems; the one these projects are reckoning with is Mobil Travel Guide's one- to five-star system, considered the gold standard by the hotel industry itself.
Typically, those staying in top-end facilities wouldn't be "caught dead'' in a three-star hotel, says professor Gabor Forgacs, of Ryerson's school of Hospitality and Tourism Management.
"They are demanding and they want everything 24-7,'' Forgacs says of the elite business traveller.
"From the way the phone is answered to the size of the flat screen TV in their bathrooms, they want it (elite service) and have no problems paying for it,'' Forgacs added.
But they apparently aren't getting that, or enough of it, in Toronto.
"We're seeing U.S. clientele who come to Toronto but don't stay overnight,'' says Barry Landsberg, director of marketing at Trump International Hotel and Tower Toronto, the outfit behind the $500 million, 70-storey hotel/condo project.
The firm conducted research beginning about three years ago and found a noticeable degree of frustration among elite travellers who feel Toronto has limited top-end room service and amenities, says Landsberg.
These people hail from all over the world, many of them wealthy business travellers from the U.S., but also the well-to-do from Europe and Asia. A room at a five-star hotel typically costs hundreds of dollars a night.
Westbank/Peterson, the developer trying to bring five-star Shangri-La here — negotiations are ongoing — is banking on a huge boom in travel from Asia in the coming years, particularly from China. Canada is waiting for China to put us on their "approved destination status'' list, which would allow Chinese citizens to obtain tourist visas to come here. Now only Chinese citizens on business trips can get visas to visit.
That approval, which could come by the end of the year and would take about another half-year to implement, could see Canada getting up to 700,000 Chinese visitors per year, many to Toronto.
And Chinese travellers will fly here and stay for a visit because they know the Shangri-La name, similar to decades ago when Americans began flying to points the Hilton chain expanded to worldwide, says Christina Flanigan, project manager for the planned Toronto hotel, a 65-storey project calling for 196 hotel rooms on 10 floors, and 334 condos on 49 floors.
"Shangri-La is one of the top Asian brands,'' she noted.
As for the five-star hotel/condo mix, it's part of a North American trend says Stephen Diamond, a municipal planning lawyer working for the Shangri-La, Trump and Four Seasons projects.
Building a five-star hotel doesn't make sense on its own because it's not profitable, he says.
Having a five-star hotel in the building is a great way to market condos, he says. In the current condo boom a developer can distinguish his product by hooking up with a five-star and using the latter as a selling feature to condo buyers.
"If you move into the Four Seasons condo on the 35th floor you can order room service from the five-star hotel." And the spa is available to the condo owner, says Diamond.
The subsidization provided by the condo component makes construction costs feasible, says Rod Seiling, president of the Greater Toronto Hotel Association.
"You're talking today for a five-star hotel, a bare minimum $600,000 per room to build,'' says Seiling, who adds that having a five-star as part of the hotel mix will be good for the city.
City councillor Martin Silva, (Ward 20 Trinity-Spadina) whose downtown ward would be home to the Shangri-La, agrees that Toronto is ready for high-end accommodations.
"Until now we had some very good hotels, but none reached that standard of the five-star,'' he said in an interview this week.
"With the film festival, our arts scene, Toronto definitely deserves to have the five-star hotel. Not that I can ever afford it,'' he adds, chuckling.
The city is well on the road to recovery after SARS dealt a blow a few years ago, and this is a good time for hotels to make long-term plans, he adds.
And they're forging ahead despite predictions from some that tourism to Toronto and Canada as a whole may be in for a hit in the wake of Washington's ever tightening border controls and a strong Canadian dollar.
AoD