Accommodation & Food Services

In the BC's Economy section of this Guide, the effect that changes in people's lifestyles can have on the economy was examined. Accommodation and food services is a good example of an industry that's grown as a result of lifestyle changes.

Consumer spending on restaurant meals has become more of an everyday occurrence. Not that long ago, people used to eat most of their meals at home, going out to restaurants only on special occasions. But with more two-income and single-parent families, there is less time to prepare meals. People are buying more convenience foods like frozen dinners, or taking fast foods and other prepared meals home with them. They also eat at full-service restaurants more often than they used to do. Most people now eat out, or buy prepared foods, at least once a week, and many visit sit-down or take-out restaurants much more frequently than that. According to a survey of household expenditures, 94% of households in BC reported spending money on restaurant meals in 2003. These purchases accounted for nearly a quarter of the family food budget, with households spending an average of $1,607 on restaurant food.

People travel a lot, both within the province, in the rest of Canada or the US, and overseas. When they travel, they're likely to eat at least some of their meals at restaurants. It's estimated that three out of every four dollars spent in restaurants come from local patrons, while tourists or business travellers account for about a quarter of these expenditures. Travellers also use accommodation services. Forty-three percent of BC households spent money on traveller accommodation in 2003, with the average expenditure being $422.

The province is an international tourist destination. Our location on the west coast of Canada means that many visitors from Asia and the Pacific Rim first enter Canada through Vancouver's airport, and a lot of them spend at least some time in BC. This has helped boost the demand for accommodation and food services, as well as generating business for many other industries that provide goods and services to tourists.

What's included in accommodation & food services?

Food service and drinking places account for eight out of ten jobs in this industry. These establishments provide food, snacks and beverages that are ordered by customers and are intended for immediate consumption. Establishments range from full-service restaurants to fast food outlets, delis, ice-cream trucks, cafeterias, take-outs, contractors who provide meals to hospitals or airlines, and catering firms. Night clubs, lounges, bars and pubs are also included in this industry. BC drinking places derive about two-thirds of their revenues from sales of alcohol; at full-service restaurants, the proportion is much lower, about 16% in 2004.

Nearly eighty percent of the jobs in this industry are at food services and drinking places

The accommodation industry provides lodging or short-term housing to travellers and other people who are temporarily away from their usual residence. These accommodations can be rented on a short-term basis or for longer periods. Traveller accommodation includes hotels, motels, ski resorts, lodges, bed and breakfasts, hostels, tourist cabins and other types of lodging. Recreational accommodation, such as hunting and fishing camps, children's camps, guest ranches, campgrounds and RV parks are also part of this industry, as are other types of lodging, such as boarding houses, dormitories and work camps, which house and feed workers at job sites in remote locations where other types of accommodation are not readily available.

Hotels, motels, lodges and resorts may offer both accommodation and food services, since many have a restaurant, bar or café onsite. Someone who works for a hotel restaurant is considered to be employed by the accommodation industry, because the main activity of the hotel is to provide lodging services to its guests.

In BC, hotels generated about 61% of their revenues from room rentals in 2003, with a significant share coming from sales of meals (19%) or alcohol (10%). Other sources of revenue included merchandise sales (1%) and services such as laundry, telephone, parking, entertainment, recreation or transportation (9%). Motels derived a much bigger share (77%) of their revenues from room rentals. Just 3% came from meals and 2% from alcohol sales, while 17% was from sales of services. For other types of accommodation (lodges, guest houses and so on), package vacations, which can include everything from accommodation and meals to the cost of transportation, guides and sporting equipment, accounted for 56% of total revenues in 2003. Room revenues (31%), meals (3%) and alcohol (3%) were less significant sources of revenue.

What's happened since 1990?

Accommodation and food services has seen changes similar to those in other people-oriented industries during the last fifteen years. Employment has increased faster than the all-industry average, but GDP hasn't grown as much. The industry employs 8% of the BC workforce, but generates a much smaller share (3%) of the province's GDP.


Employment in accommodation & food services has grown a little faster than in the rest of the economy

The wide gap between the industry's GDP and employment shares reflects the fact that accommodation and food services is an extremely labour-intensive industry. You can't prepare and serve meals, or offer accommodation services without employing a lot of staff. However, many of the people working in the industry have part-time jobs, and receive low hourly wages, so while they boost the job count, the wages paid for their services don't have nearly as big an effect on the industry's GDP.

The province's accommodation industry has seen some big changes in recent years. At one end of the spectrum, many new, large hotels have been built to meet the growing demand for accommodation services in places like Whistler, where there are many high-end accommodations. At the other end of the spectrum, bed and breakfasts (B&Bs) are becoming an increasingly popular option for travellers who prefer more personalized service when they are away from home.

B&Bs, vacation rentals and other non-standard accommodations are becoming more popular with travellers

Hotels account for three quarters of total room revenues in the province, a ratio that has remained stable during the last decade. However, other types of accommodation services are gaining ground, with room revenues more than doubling during the ten-year period ending in 2005. In particular, bed and breakfast operators, resorts and vacation rentals have seen strong growth during the last few years.

About vacation rentals

There's a growing segment of the market that doesn't provide traditional types of accommodation. Condo or home owners in some areas of the province are offering their units for rent to travellers when they do not need them for their own personal use. The traveller can stay in a self-contained, fully-equipped apartment or house instead of in more traditional types of accommodation.

These arrangements are often made through agents who keep a list of properties that are available for vacation rentals. They are especially popular in resort areas, but are found throughout the province. Other arrangements that are growing in popularity include time-share packages (where people pay a fee to become part-owners of a group of properties, at which they can stay for a limited period each year), and condo-type ownership of hotels and other properties.

What are the most common occupations?

Eight out of ten workers in this industry are in sales and service occupations. Food and beverage servers make up 18% of the total workforce, while cooks (14%) and cashiers (6%) are other common occupations. Other typical occupations in this group include cleaners and janitors (5%), food service supervisors (4%), chefs (3%), bartenders (3%) and maitre d's and hosts (2%).

After sales and services, restaurant, accommodation and other managers (14%) account for the biggest percentage of the workforce. The remaining 5% are employed in various other occupations.

Eight out of ten workers are employed in sales and service occupations

How many people work in accommodation & food services, and how much do they earn?

In 2005, BC's accommodation and food services industry employed 175,800 people. Eight out of ten worked in the food and beverage services industry.

Hourly wage rates in the industry are quite low, averaging $12.00 an hour in 2005, just over 60% of the average for all industries in the province. The typical worker spent 32 hours a week on the job in 2005. Wages are lowest in food services and drinking places ($11 an hour). Workers in accommodation services received an average wage of $14 an hour in 2005.

Although wages in accommodation and food services are well below the levels seen in most other industries, workers supplement their earnings with tips received from customers. A standard tip is usually between 10% and 20% of the bill, so some food and beverage service workers derive more of their income from this source than from the wages that they're paid by their employers.

What are the characteristics of the workforce?

Part-time employment is more common in this industry than in any other industry group. Thirty-seven percent of the workers were employed part-time in 2005. The only industry with a similarly large part-time workforce was retail trade, where the rate was 32%.

The industry is not highly unionized. About 10% of the people who work in accommodation and food services have union coverage. The average for all industries is 33%.

The workforce is largely female, with women holding three out of every five jobs in this industry.

Unemployment rates averaged 8.4% during the period from 1990 to 2005, the same as the average rate for all industries in the economy. However, workers in this industry are more likely to experience unemployment than other service-sector workers. The jobless rate in the service sector averaged 5.1% during this period.

Small, independently owned and operated restaurants are found throughout the province. In the accommodation industry, trailer courts, campgrounds, lodging houses, lodges, B&Bs and vacation camps are often owner-operated. However, only 10% of the workers in this industry are self-employed, about half the average for the province as a whole. 

One reason for this is that it takes a lot of people to operate a typical restaurant or accommodation property, and the owner-operator is often only one of several people employed at an establishment. Ten percent of workers in the accommodation industry, and 9% of those employed in food services and drinking places, are self-employed.

Small establishments are more common in this industry than in the economy as a whole. Forty-six percent of all employees work in small establishments, with fewer than 20 co-workers. Almost the same number (44% of the workers) has jobs at establishments with between 20 and 99 employees. There are comparatively few establishments with more than 500 employees.

Most people who work in the industry are employed at relatively small establishments

 

 

Where are the jobs located?

Thompson-Okanagan and Vancouver Island/Coast have a higher-than-average share of jobs in this industry

The demand for accommodation and food services is often related to the size of the population living in an area. However, hotels, motels and other types of accommodation are also located at or near popular tourist sites that may be outside urban areas. For example, there are several large hotels in the Whistler area, which have been built to accommodate skiers visiting the resort town. Fishing or hunting lodges, guest ranches and similar types of accommodation may be found in rural or wilderness areas.

Thompson/Okanagan accounts for a bigger than average share of total employment in this industry. With its scenic beauty, orchards, wineries and varied outdoor recreation opportunities, the region is a popular spot for tourists. It's also a frequent stopping point for travellers who are either driving or taking the train between Vancouver and Calgary, since it's a relatively easy day's drive from either city. The route is a popular one. Many visitors to the province, from overseas and other parts of the country, choose to drive or travel by train or bus through the mountains in order to experience the beauty of the Canadian Rockies.

Vancouver Island/Coast is also popular with tourists from North America and overseas who often include a visit to Victoria, Long Beach or other parts of the region in their travel itineraries. Famous hotels such as the Empress, a historic railway hotel located in Victoria are tourist attractions in their own right.

What's the outlook to 2014?

The accommodation and food services industry's share of total employment is expected to continue to grow a little faster than average during the next few years. The industry is forecast to employ nearly 9% of BC workers by 2014. The industry's share of total GDP is expected to increase to 4% by 2014.

GDP and employment in accommodation & food services are expected to grow a little faster than the rest of the economy during the next few years