Hotelier expanding in midst of recession
Developer Steve Gupta is opening hotels across the Greater Toronto Areaat a furious rate. That makes him either the most foolhardy hotelier inthe city, or possibly the smartest.
Developer Steve Gupta is opening hotels across the Greater Toronto Area at a furious rate. That makes him either the most foolhardy hotelier in the city, or possibly the smartest.
Gupta is charging ahead despite a recession that has hurt business travel. Then there’s the strong Canadian dollar and new passport regulations that have torpedoed American tourist traffic.
“I’m an optimist,” says Gupta. “I really feel that the economy will turn around, that people will start travelling again.”
Gupta has bet big in the past, but not like this. At the end of July he is re-launching his Comfort Inn on Jarvis Street into a Hilton property after a $4-million renovation. In April he unveiled his $60-million Hilton Garden Inn in the downtown core. By the end of this year he will have built two more hotels, with others slated for completion next year.
Gupta is building so many properties that the former math major is momentarily stumped when asked how many rooms he owns. “It’s probably 1,600. Or wait, it’s closer to 1,700,” he says.
In all, Gupta has nine properties, with five under development.
According to a survey by Colliers International Hotels and HLT Advisory, hoteliers think 2009 is pretty much a write-off.
Room prices and occupancy rates are down significantly. At the end of May, occupancy levels were down to 57 per cent in the GTA, a drop of seven percentage points from a year earlier. The average daily room rate was $125.83, down eight per cent from last year.
Gupta has heard it all before. But he doesn’t intend his privately held, Markham-based Easton’s Group of Companies to become another statistic.
He has forced the naysayers to eat humble pie before. When he opened his Comfort Inn on Jarvis in 2000, right beside a strip joint in one of the city’s seedier areas, they said he would fail spectacularly.
That property went on to have some of the highest occupancies in the city.