Newfoundland hotel rooms aren't jammed with tourists coming to enjoy unique local customs and appreciate the whales, seabirds, icebergs and stunning natural landscapes, but they should be, according to hotel industry veterans.
Many of the area's hotel beds are filled instead with “road warriors,” as Clayton Hospitality co-owner Judy Sparkes has observed in her decades running a total of 16 hotels along with her two brothers in the sprawling, sparsely populated province.
“Typically we would survive on commercial, corporate travel, with 78% of the traffic in Newfoundland and Labrador coming from within the province," Sparkes said in an interview. "Whether you’re an insurance company representative, food supplier, everybody is on the road."
Sparkes and her two brothers recently sold the last three hotels of the Clayton Hospitality portfolio, thus ending their involvement in the hotel business that their father launched in 1968.
Wave Hospitality bought the Clayton Hospitality portfolio with financing from the Canadian Western Bank and CFO Capital. The properties contain a total of 283-rooms, and are located at 106 Airport Road in the capital city of St. John’s; 112 Trans-Canada Highway, in Gander, a city of 12,000 residents; and 247 Trans-Canada Hwy in Clarenville, a two-hour drive northwest of Saint John's and home to 7,000 people.
Terms of the transaction were not disclosed.
The new investment in the Newfoundland hotel industry is seen by some real estate watchers as a glimmer of hope that the province will further blossom as an international tourist attraction following some middling recent financial results in the province’s hospitality industry.
In Newfoundland and Labrador, room rentals decreased by 7% in 2024 compared to the year prior, and room occupancy was 54%, three points lower than in 2023, according to a provincial government report. Total room revenues decreased 1% last year compared to 2023. The average daily rate for rooms in Newfoundland and Labrador rose to $168 in 2024, up 6% from the $158 in the previous year, the report said.
Hoteliers and other hospitality veterans discussed the challenges earlier this month at the Conference and Trade Show hosted by Hospitality Newfoundland and Labrador at the Jag Hotel in downtown St. John’s. The 34 sessions held over the three-day conference attracted about 380 industry stakeholders wrapping up with a 1 a.m. rock show by local musical act Billy and the Bruisers.
More travel options needed
Newfoundland hotel owners focused largely on establishing better travel options to the province that has roughly 550,000 residents and is surrounded by 29,000 kilometres of coastline.
“They want more direct flights from other parts of the world and from within Canada,” said Carrie Penney, manager of communications for Hospitality Newfoundland and Labrador, in an interview. “They want more ferry rides. That's one of the only ways you can access Newfoundland, there are no bridges.”
The 140-room Comfort Inn in St. John’s that the Sparkes family sold to Wave is one example of the challenges facing the local hotel market because it is not currently operating as a hotel. Clayton Hospitality leased the property to the provincial government on a three-year deal in February 2024 to house the homeless.
As for the Sparkes family, they also have owned hotels in New Brunswick and Nova Scotia over the years but never owned more than seven hotels at one time. Their largest hospitality property, a 158-room Courtney Bay Hotel in St. John’s, has been repurposed for other uses.
“Some years are diamonds, some are dirt, depending on what’s happening,” said Sparkes. “The economy has been up and down without question, however we are a very resource rich province when you look at our energy, mining, and fishing. They are very substantive industries.”
Sparkes said that the spirit of hospitality in The Rock, as Newfoundland is nicknamed, is best summarized by the dramatic events that followed the Sept. 11, 2001 attacks. That's when 75 planes landed in airports throughout the province, including 38 in the small city of Gander, where locals helped displaced air travelers.
“Newfoundland really played a pivotal role in those tragic events,” said Sparkes.
The hotel business led to Sparkes and her brothers Bruce and Steve becoming familiar with the multitude of villages and towns that make Newfoundland and Labrador unique, but one place stands out above all others to Sparkes.
“My heart is in Brigus, it’s an hour from St. John’s and it’s a very small community of maybe 600 homes, most of which are seasonal," she said. "I’m glad to be one of them.”
For the record
A Colliers team including Jessi Carrier represented Clayton Hospitality in its transaction with Wave Hospitality.