Tourism groups worry as B.C.'s short-term rental rules change

Ralph and Tina Gerlitsch say they've had to rethink their retirement plans due to B.C.'s new short-term rental regulations.

The coupleown a bungalow on a leafy residential street in the Glenmore neighbourhood of Kelowna, B.C., and, for the last couple of years, they've also been running a seasonal Airbnb in a downtown Kelowna highrise.

They would rent the apartment to tourists in the summer and students during the academic year.

"We ran [it] for two years and it was wonderful," Ralph Gerlitsch said.

However,starting May 1,new provincial rules will make such enterprises illegal.

WATCH | B.C. announces details of new short-term rental rules:

B.C. announces new rules around short-term rentals to take effect May 1

4 months ago

Duration 2:05

A provincial rule to limit short-term rentals to a homeowner's principal residence plus one secondary suite or accessory dwelling comes into force in British Columbia on May 1 in 60 communities. As Zahra Premji reports, 17 additional communities have chosen to opt in to the rules, despite being exempt.

In many B.C. communities, including Kelowna, short-term rentals will only be allowed in an operator's principal residence, and one secondary suite or carriage house on the same property.

The Gerlitsches say their Airbnb is one of those that will have to shut down.

"This was our HailMary for retirement. It really hurts when somebody at a desk, in government, can tell me what I can do with my property,"Ralph said.

"Don't ask me if I'm angry, but I certainly am."

While the provincial government hopes the rule changes will free up much-needed housing for long-term residents, critics say they are also creating uncertainty for the broader tourism industry with some worrying the Okanagan will become a destination reserved for the wealthy, and businesses will suffer in the process.

Uncertainty for tourists and tourism

Known for its lakes, beaches and wineries, the Okanagan Valley attracts crowds each year, with more thantwo million overnight trips to the Kelowna area alone in 2023, according to Tourism Kelowna statistics.

The same agency saysthe tourism industry has an annual economic impactof $2.4 billion in the Central Okanagan.

That means many businesses have a financial stake in tourists finding a place to stay and some feel as if the short-term rental rules are limiting affordable accommodation options.

"Our hands are really tied unless they suddenly open up a bunch of brand new hotels at a decent price," said Krystina Rossworm, whose company offers private tours ofwineries and adventure spots in the Lake Country region.

"I am afraid of what's going to happen and I feel very powerless against this type ofdecision."

Tourists themselves have been left uncertain about what the changes mean for them.

Jackie Roberts of Lacombe, Alta.,booked accommodation in Kelowna this summer through Airbnb.

Now she's unsure whether the booking will be able to go ahead.

When she went to look for alternative places she ran into issues with both availability and price.

"I know it is going to deter people from going if, one, there is no vacancy and, two, we are paying double the price or more to find a place that is available," Roberts said.

Plenty of available rooms: hotel director

An executive in the local hotel industry disagrees that tourist accommodation will be a problem under the new regulations.

Rudolf Heider, director of hospitality for Argus Properties, which has four hotels in the Kelowna area, says hotels have plenty of space to cope with demand.

Heider said in 2023 hotel occupancy in Kelowna was 59 per cent, lower than the 69 per centoccupancy provincewide.

He believes the regulation can actually help the tourism industry by helping to open up housing for staff to live in.

"We have, over the last couple of years, seen quite a few managers leave Kelowna and go to other places [like] Kamloops, Trail, etc.,because housing is just not affordable any more, or not available," he said.

Asked if the price of hotel rooms is going to increase because hotels have less competition, Heider said he doesn't think his hotels competethat much with Airbnb.

"I don't feel it will be a huge increase in the pricing," Heider said.

"I don't think it will bring that much demand that you can really push pricing and I think we have room even during those [peak] months to really take the additional demand."

More hotels being built

Data from Tourism Kelowna shows the area's hotels are typically between 70 and 90 per centfullin the summer.

The society's CEO,Lisanne Ballantyne, said the Kelowna area currently has about 4,500 room nights in conventional accommodation and, during peak seasons, around 2,000 active short-term rental listings.

That means short-term rentals have made up about 30 per cent of Kelowna'stourist accommodation during peak seasons.

Ballantyne said there are more hotels in the works for the city.

"My office probably gets at least three requests every month from developers that are looking for information to help them develop hotel properties. We have a number of cranes in the sky and we also have a number of hotels waiting to come online as well," she said.

As for Ralph and Tina Gerlitsch, they'll be selling their home and moving into what used to be their short-term rental apartment.

Ralphexpects they'll soon be handing over the keys to his house to a new owner.

"There will be tears. For sure, there will be tears," he said.