Tough times, but not yet last call for Vancouver’s hospitality scene
May 28, 2023
Many industries have been struggling lately, but headlines in the hospitality world have been particularly bleak.
A recent restaurant industry survey suggested about half of Canadian eateries aren’t turning a profit, and bankruptcies were up 116 per cent year-over-year. B.C.’s restaurants are facing labour shortages and soaring grocery prices. High rents and soaring property taxes have been blamed for countless restaurant closures, especially in Vancouver where land values are already high — and city council just approved the highest property tax hike in recent memory.
And this week news broke that the Donnelly Group, probably the most prominent B.C.-based pub chain, is struggling financially and seeking creditor protection to restructure hoping to keep their 14 bars and restaurants open, and 800 employees working.
Speaking earlier this week, Donnelly Group CEO Jeff Donnelly said: “When you talk to people in our industry and our industry associations, the forecast is not good. I hate talking about it, frankly, because I love this industry.”
Donnelly’s petition filed this week in B.C. Supreme Court cites a litany of struggles for their bars and nightclubs, ranging from neighbourhood-specific (“severe” impacts of “civic conditions” in Gastown and Downtown Granville), to B.C.-wide (minimum wage increases), national (increased interest rates and federal liquor taxes), and global (inflation and supply chain issues).
“Business has returned to close to 2019 revenue levels, but there has been margin compression due to increased labour and operational costs resulting in much less profitable businesses,” the petition says.
Source: Vancouver Sun
