At Priest Creek Family Estate Winery in Kelowna, B.C., sales have been plummeting for two summers in a row now.
“Last year they were 30 per cent,” said winery owner Darren Sawin. “This year, we are probably down another 10 per cent on top of that.”
According to Sawin, the slowdown in tourism coincided with provincial restrictions on short-term rental accommodations in May 2024.
“We noticed it immediately. Our sales dropped. Our traffic dropped,” Sawin said. “We used to have lineups out the door and now our bar is empty.”
The winery is far from alone, as a number of restaurants and boat rental companies have reported feeling the hit, too.
The economy is believed to be a big factor but according to tourism officials, the rental restrictions are also having an impact.
“If we had that additional accommodation that had kitchenettes in them, we would see people wanting to book those, so there is that layer of guest that isn’t here,” said Ellen Walker-Matthews on Monday, the CEO and president of the Thompson-Okanagan Tourism Association (TOTA).
In an email to Global News, Kelowna mayor Tom Dyas said, “While we have heard from some businesses reporting a busy season and others indicating a slower pace for them, it is important to wait for the official tourism data before drawing conclusions about the season’s performance.”
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Dyas added, ‘We look forward to reviewing the full report when it is released and continuing to work collaboratively with the tourism industry to support a strong and sustainable local economy in Kelowna.”
The provincial restrictions were implemented in an effort to bolster the long-term housing supply amid a severe shortage and bring down housing costs.
They prohibit short-term rentals in secondary homes, allowing them only in principal residences.
B.C.’s minister of housing Christine Boyle said she does sympathizes with tourism-reliant businesses struggling.
“Very aware of it and very sympathetic to these challenges,” Boyle said.
But the minister stood firm on the restrictions, saying they are having the desired effect as vacancy rates rise across the province.
Boyle said that includes Kelowna, where securing affordable housing has been a huge challenge including for those who are the backbone of the tourism industry.
“That industry, along with many others, was struggling to find a workforce who could afford local homes,” Boyle said. “We know that tourism and hospitality not only rely on spaces for visitors, but rely on the availability of affordable housing for their own workers.”
Boyle added that municipalities can opt out of the principal residence requirement once a community maintains a minimum 3 per cent vacancy rate for two consecutive years.
According to the Canada Mortgage and Housing Corporation (CMHC), Kelowna’s vacancy rate jumped to 3.6 per cent last October.
If it stays above that threshold until October 2026, the city will have the option to opt out.
Dyas said that while the city is encouraged by the positive trends in the vacancy rate, it is too early to predict whether Kelowna will meet the threshold to apply for an exemption or to speculate on potential changes.
“We will continue to closely monitor the situation and advocate for an approach that reflects the unique needs of our community,” Dyas added.
But even if Kelowna does opt out, Sawin said rebuilding tourism numbers won’t happen overnight.
“It’s going to be a couple of years before people get the message and come back,” Sawin said.
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