Data show downtown Vancouver continuing to recover from the pandemic-era slowdown, though challenges remain, according to a new State of Downtown report by Downtown Van – a new name for what was long known as the Downtown Vancouver Business Improvement Association.
Its annual report card notes pedestrian traffic and transit use rising and gives reason for many business owners to look ahead to a busy summer thanks to the cruise sector anticipating a record 1.27 million cruise-ship passengers.
All is not rosy for the downtown economy, however.
Vancouver saw its highest office-vacancy rate in 20 years last year, and office vacancy remained high, at 9.4 per cent at the end of 2023, according to Downtown Van. That rate, however, is among the lowest among North American downtowns, the report said.
The report recognized that restaurants, pubs and bars are struggling in the 90-block area of downtown that Downtown Van represents. It found a net loss of four food and beverage establishments last year, compared with 2022. Some provided statistics included that 35 per cent of B.C. restaurants are losing money, 17 per cent of restaurants are just breaking even and that there was a 48-per-cent annual increase in restaurant bankruptcies.
BIV has reported Statistics Canada data, released March 25, that paints a picture of tough times for restaurant, pub and bar owners across the province. That data showed B.C. restaurants, pubs and bars enduring the steepest drops in sales of any province in January. Those record sales drops were on seasonally adjusted bases year-over-year and month-over-month.
Industry advocates told BIV that the sales declines stemmed largely from the high cost of living in B.C. and interest rates that have stayed at five per cent since July – higher than any time since 2001. Letter writers to BIV (yes, we still get some) have said that they eat out less because restaurants are passing on food-price increases plus added inflation and that the default tip culture of adding up to 25 per cent is excessive.
"Dining is one of those areas where people cut back first, because everything is so expensive," said Downtown Van CEO Jane Talbot. "They reduce the number of times they go out to restaurants because they have to save money."
Storefront vacancy in the area that Downtown Van represents reached 13.7 per cent last year, according to the report. That compares with an 11.1-per-cent city-wide rate. That downtown district also saw a net loss of five storefront businesses, according to the report.
Downtown Vancouver’s most notable retail story of the year was the June closure of the Nordstrom Inc. (NYSE:JWN) store on Granville Street between Robson and West Georgia streets, the report said.
Indeed, the future of that 230,000-square-foot vacancy at CF Pacific Centre is as unclear as ever.
“These things take time,” Cadillac Fairview senior vice-president of retail Lillian Tummonds told BIV last month.
“Nothing is confirmed.”
Hotel occupancy is a bright spot
The report cited downtown Vancouver hotel occupancy rising seven percentage points, to 79 per cent from 72 per cent in 2022.
"This puts downtown hotel occupancy within a whisper of the 80 per cent [rate] reported in 2019," the report said.
BIV reported last month that hoteliers across the entire Metro Vancouver region are doing well.
Metro Vancouver hotel rooms in February were on average more expensive and more filled than those in any other major market in Canada, according to CoStar, a global provider of real estate data, analytics and news.
Back in July 2023, Vancouver hotel rooms charged an average $347.08 daily rate, according to CoStar. That was the highest figure that CoStar had ever recorded for a major city in Canada.
"We're doing well, comparatively, but that doesn't mean our challenges aren't real and that we don't feel them every day," Talbot said. "There's still a lot of work to do."
Downtown Van purchases anonymized data from Environics Analytics to get mobility device data for its four corridors: Alberni Street, Robson Street, West Georgia Street and Granville Street. It can tell from that how many unique visitors come to the areas.
Its report cited this to say that more people are visiting downtown, but less often.
"The Granville Entertainment District saw an average of 14 per cent fewer total visits compared to 2019, but saw 2.5 per cent more monthly unique visitors," the report said.
"West Hastings Street is the only retail corridor that has not averaged more monthly unique visitors in both 2022 and 2023 over pre-pandemic volumes. Downtown retail corridors seeing fewer total visits despite having more unique visitors can be strongly attributed to the rise in hybrid work culture. Fewer repeat visits to retail corridors can be expected as employees continue to work in the office two to four days a week as opposed to five."
The report said that while downtown sees consistent visits from people who live in all areas of the Vancouver region, half of all visits and 29 per cent of all unique visitors originated from within the city of Vancouver.
Transit is helping many of those visitors access the downtown
Downtown Van's area saw 43.5 million transit boardings, its report said. That is a 21-per-cent increase from 2022 but a 22-per-cent decline from 2019.
"Bus and SkyTrain boardings within the Downtown Van district have now recovered at roughly the same rate, but SeaBus boardings have seen the best recovery at 19 per cent below 2019," the report said. "The West Coast Express remains the slowest TransLink service to recover."
In November TransLink estimated that its ridership had reached 88 per cent of pre-pandemic volumes.
This means that with the downtown Vancouver area at 78 per cent of its 2019 level, the recovery within Downtown Van's district trails that of TransLink system as a whole. This trend has held steady since 2020.
Exciting events are on the calendar
The city's large LGBTQIA2S+ community is readying to welcome Canada Pride 2024, which is what it calls the "biggest pride season our city has ever seen."
The July 26 through Aug. 4 extravaganza will feature Vancouver Pride events such as the VanPrideFest and the Vancouver Pride Parade, along with what organizers are calling a new Queer Rights Summit, among other programming additions.
The 111th Grey Cup is set to be played at BC Place in November, while Taylor Swift's The Eras Tour will have multiple dates in December at BC Place. The Junos are set for March 2025.
The report notes other key dates on the horizon, such as new B.C. regulations restricting short-term rentals coming into effect in May, and a new Granville Plan set to go before city council in December.
"So much work needs to be done to revitalize Granville Street," Talbot said. "The Granville Plan is critical to that."
