Week of Oct. 12, 2009



Ho-Lee-Chow Franchise Shuts Down in Ontario
Ho-Lee-Chow, based in Etobicoke, Ont., which once operated up to 22 restaurants, including 18 franchises, has shut down operations. While the automatic telephone response still works at its headquarters, the company is not responding to messages, and that includes its president, Jake Cappiello. “Due to circumstances beyond our control, one of which is the poor economic climate, another of which is a refusal to compromise on quality and service you’ve come to appreciate, Ho-Lee-Chow has closed down operations,” says the message. “We truly apologize for the inconvenience and thank you for your patronage.” Its website is also no longer functional.

Vancouver City Council Approves Uniform Liquor Service Hours
Uniform liquor hours for all restaurants, with extensions for many and shortened hours for some, have been approved by Vancouver City council. The new bylaw, which goes into effect in about two weeks, will permit Vancouver restaurants to serve alcohol until 1 a.m. on weekdays and 2 a.m. on weekends. About 80 per cent of restaurants will have their closing hours extended on the weekends from the present requirement for 1 a.m. closing seven days a week. The balance — businesses that were issued licenses after 2003 and now serve alcohol until 1:30 or 2 a.m. seven days a week — will have their weekday hours cut back to 1 a.m. Mayor Gregor Robertson said, “Overall, it’s a significant increase in hours across the whole restaurant industry, which should be good for business. ”Provincial regulations permit restaurants to serve liquor from 2 a.m. to 4 a.m., but require municipalities to approve hours after midnight.

New 320-Room Boutique Hotel Approved for Exhibition Place in Toronto
A 26-storey, 320-room boutique hotel, the Hotel in the Garden, has been approved for Toronto’s Exhibition Place. It is expected to open in November 2013. The Board of Governors of Exhibition Place unanimously approved a proposal from family owned HK Hotels, based in New York City, which operates four smaller boutique hotels with specialty themes. The plan still requires approval by Toronto City Council, but Joe Pantalone, deputy mayor for the city and chairman of Exhibition Place, said the city will be “very supportive.” The new hotel will have a 49-year lease on the property and will be close to the existing Direct Energy Centre, which is connected to the new Allstream Centre (opening in two weeks). The hotel is being designed by Toronto’s Maragna Architect Inc., and includes meeting rooms, a ballroom, library and spa.

PKF Reviews “Bleak” 2009 — Fundamentals Strong for 2010
What a difference a year makes. When PKF Consulting held its annual outlook in early October
2008, the projections for the year ahead were fairly positive. But a year later, with the recession continuing to wreak havoc across all industry sectors, and 2009 quickly coming to a close, the reality is that the hotel market has been impacted worse than expected. “What the hell happened?,” asked David Larone, a director at PKF, in making his opening address. In answering that question, Larone and his colleagues, who joined him as part of panel presentations in Toronto and Vancouver, painted a bleak picture of where the hotel industry currently sits, but concluded that fundamentals are strong for the upcoming year and that Canada is poised to rebound sooner than the U.S. “We’re looking at erosion of occupancy in every region in Canada,” echoed Brian Stanford, another director with the company. “We’ve had a five-point drop in occupancy, from 63 per cent in 2007 to 58 per cent this year.” It’s the lowest level since 1992. “Those five percentage points represent a total of five- million room nights lost in occupancy.” Though PKF believes demand levels will come back, the money lost from those room nights won’t.
• In terms of regional performance, Fran Hohol, principal at PKF, stated, “the West got hit harder than central Canada, due to the fall of natural gas prices.” RevPAR actually dropped by 18 per cent in Western Canada, compared to 17 per cent in Central Canada and 11 per cent in Atlantic Canada. Ironically, profitability has dropped to 1997 levels, down to $5,400 per room in Central Canada. “The big problems are sitting in the major urban centres,” said Stanford, referring to sharp declines in occupancy in Montreal, Toronto and Halifax. “We’ve dropped six points in Toronto and we’re down $20 on rate from 2008,” he said, citing severe rate discounting as part of the problem. On the investment front, there’s not a lot of activity. “Nobody is buying, nobody is selling,” said Stanford. As of this past June, there had only been 29 transactions across Canada compared to 48 last year and 68 in 2007.
• So where is the hotel industry headed? According to Larone, there’s conflict between operators and owners as to how to run a hotel in this current environment. But the question remains: “How do we manage the expectation of what next year’s budget will be?” Larone suggests it’s time to disengage ourselves from what’s happening in the U.S., keeping in mind that our fundamentals are much stronger. “Every province is projecting positive GDP growth for 2010, with increases above 2.8 per cent,” says Hohol. She adds that business travel is expected to grow by 4.5 per cent while leisure will be up by three per cent. A modest 1.9 per cent increase in the number of Americans travelling to Canada is also forecast. And with the 2010 Olympics a few short months away, the potential for more growth is even stronger. “We’re poised for recovery,” concluded Stanford, pointing to positive forecasts for 2010 to 2015.” The irony, however, is that 15 years later, we’ll still be below where we were at our peak.”

Health Food Industry Claims Regulatory System “Broken”
A major lobbying program has been launched by the Canadian Health Food Association (CHFA) in Toronto “to save the Natural Health and Organic Products industry.” On its new website, the CHFA attacks the federal government’s Natural Health Products Directorate (NHPD), charging that, “the system is broken. Health Canada must postpone any enforcement activity until the system is fixed.” CHFA complains that in the past five years more than 38,000 product licence applications have been submitted under the Natural Health Products Regulations, but just over 13,000 were approved. The deadline for enforcement of licensing is April 2010. The CHFA says it represents 1,100 business owners and operators in an industry that contributes $3.5 billion to the Canadian economy.

Toronto’s King Edward Hotel Sold for $52M to Skyline
The five-star, 298-room Le Meridien King Edward Hotel in downtown Toronto has been sold for $52 million to Skyline Executive Acqusitions Inc., a unit of Skyline International Development Inc., also based in Toronto. The hotel is operated by Starwood Hotel & Resorts Worldwide. Built in 1903, the King Edward Hotel was named for King Edward VII, and it was last purchased by Lehman Brothers UK in 2006 for $62.5 million. Extensive renovations followed the purchase, at a cost of $17 million. Skyline International Development Inc. is 67 per cent owned by Mishorim Development Group, based in Tel Aviv, Israel, and 33 per cent owned by Israel Land Development Company. Mishorim CEO Rami Shriki welcomed the new acquisition, “because it is a property occupying an entire block in the heart of downtown Toronto, and has generated handsome revenue for its owners for years. The company also will complete construction of its residential project near the hotel. The project has 500 condominiums in two high-rises, as well as parking space. The company will make some of the parking available to the hotel’s guests and visitors.” Skyline International also acquired the year-round, 680-acre Horseshoe Valley Resort in July of last year for $37 million. It also owns the 111-suite Pantages Hotel and Spa and the Cosmopolitan Hotel in downtown Toronto.

Burger King’s New 20/20 Design Coming to Vancouver
Burger King Canada plans to introduce its new 20/20 remodelled restaurant design this year in
Vancouver, joining more than 60 Burger King restaurants that have adopted the design in cities such as Miami, Mexico City, Edinburgh, Shanghai and most recently at Schiphol Airport in Amsterdam. The Schiphol Airport unit, with annual sales of US$12.5 million, is the highest-grossing BK restaurant in the world. In its first month following the redesign, BK Schiphol experienced record sales, a typical result of a 12 to 15 per cent post-remodelling gain, according to Miami-based Burger King Corp. chairman and CEO, John Chidsey. Restaurants that have been torn down and completely rebuilt to 20/20 standards at the same location have seen sales climb by as much as 30 per cent. Speaking at Schiphol, Chidsey said, “As we continue to grow and strengthen the brand worldwide, this new restaurant design exemplifies our vision for the brand’s future and reinforces our goal of delivering superior products and positive guest experiences by creating an exceptional and memorable dining environment that builds on our signature assets. ”More than 75 additional restaurants (of 12,000 locations worldwide) are scheduled to be completed with the 20/20 design by the end of 2010.
• The 20/20 concept is described as a classic and contemporary restaurant design with bold
colours, textures, imagery and text that evoke the industrial look of corrugated metal, brick, wood and concrete. “I’d call it more contemporary, edgy and futuristic,” Chidsey said. “It feels so much more like an upscale restaurant.” Features include a variety of seating options — bar, banquette, booth or table, a series of liquid-crystal display menu screens, a prominent red flame parapet dining area anchored by a flame chandelier and a “grill-centric” design. The kitchen revolves around the Duke Flexible Batch Broiler, which maximizes cooking flexibility, offers a broader menu selection and reduces operational and energy costs by cycling on and off. Gas consumption is reduced by 52 per cent compared to previous broilers, and the consumption and cost of electricity is reduced by 90 per cent. The new look is expected to cost franchisees between $300,000 and $600,000 per location.

Toronto Restaurant Closed After 36 Get Sick, One Dies
A salmonella outbreak at a Scarborough, Ont. restaurant may have resulted in one death and the illness of some 36 people, according to Toronto Public Health. Ruby Chinese Restaurant was closed on October 7 due to a number of violations related to unsafe food handling and sanitation. There are presently 22 lab-confirmed cases of salmonella and 14 additional probable cases. Three of these cases required hospitalization, and one elderly man has died. The period of exposure at the restaurant is believed to be between September 12 and 20. Food sample test results taken after this period are negative for salmonella.

Banff Chef Wins Gold in WACS Americas Final
On September 26, Chris Thomson, executive sous chef at The Banff Centre in Alberta, was awarded a gold medal at the WACS Global Chef’s Challenge Continental Final for the Americas, held in Sao Paul, Brazil. He was assisted by his apprentice, Myles Fedun of Jacks Grill in Edmonton. The duo competed against chefs from the U.S., Chile and Brazil. As the winner for the Americas, Thomson will compete against the other continental winners in January 2010 at the WACS Global Chef’s Challenge final in Santiago, Chile. Thomson was the winner of the 2009 CCFCC National Chef’s Challenge at the national conference of the Canadian Culinary Federation (CCFCC) in Kelowna, B.C., in May.

Two Canadians Honoured for Leadership by MAFSI
Two Canadian equipment and supply executives have been recognized for their leadership by the Manufacturers’s Agents Association for the Foodservice Industry (MAFSI). Danny Collis, Collis Group, Inc., based in Richmond Hill, Ont., has been appointed MAFSI treasurer. Neville Jeens of the Mississauga, Ont.-based W. D. Colledge Co., Ltd., was the winner of the association’s Lifetime Membership Award. Jeens served as president of MAFSI in 2002, and was instrumental in the establishment and growth of the Canadian chapter since 1995. Other officers announced include: MAFSI president, John Hoskinson, E. Ruff  & Associates, Inc., Cincinnati and vice-president, Michael Turetzky, Chernoff Sales, Inc., Pompano Beach, Fla. The announcement follows the 44th MAFSI Annual Conference, which was held in Toronto, September 23 to 25. (See MAFSI and FCSI Worldwide Meet in Toronto, TheWhat’sOnReport, September 28.)

Coast Hotels & Resorts to Re-brand Hotel in Penticton, B.C.
Coast Hotels & Resorts has signed a franchise agreement with the Locations West Investment Group to re-brand the Travelodge Penticton as the Coast Penticton Hotel, effective April 19, 2010. Robin Agur, president of Locations West Investment Group, commented, “Coast Hotels & Resorts has a very strong market presence in Western Canada and the U.S., which is where the majority of our traffic comes from, so this re-branding fits nicely with our long-term vision for the property.” The hotel is located just minutes from downtown Penticton, close to the Penticton Trade & Convention Centre and across the street from the new, 5,200-seat South Okanagan Events Centre.

Holiday Inn Express Edmonton Opening October 15
IHG (InterContinental Hotels Group) will open Edmonton’s newest Holiday Inn Express Hotel & Suites on October 15. The 191-room (including 52 King Business Class suites), new-build property is part of the $1-billion Holiday Inn brand re-launch program. It is located in a suburban area near the South Common Shopping Centre, within a short driving distance of several local businesses and institutions, including the University of Alberta. “Holiday Inn Express hotels are designed to be the smart choice for value-conscious business and leisure travellers,” said Gina LaBarre, senior vice-president, Brand Delivery, the Americas, IHG. Diana Gonzalez, general manager, commented, “We invested in this property with the goal of providing a comfortable atmosphere, while offering the tools our guests need to ensure a productive stay. We’re pleased with the end result.”

Brookstreet Hotel Named One of Ottawa’s Top 10 Employers
The four-diamond Brookstreet Hotel in Ottawa has been named one of the National Capital Region’s Top 10 Employers by an independent selection committee for The Employees’s Choice Awards (ECA) program. Organized by the Ottawa Business Journal, and the human resources services company TalentMap, the ECA is supported by the Human Resources Professionals Association (HRPA), Ottawa Chapter. Brookstreet’s executive vice-president and GM, Patrice Basille, commented, “The leaders at Brookstreet are passionately committed to the quality of the work environment for its partners (staff). To have such feedback is indeed an indication that our efforts are recognized.”

B.C. Chefs to Celebrate International Chef Day, October 20
The B.C. Chefs’ Association will join chefs’ organizations from around the world to celebrate International Chef Day on October 20. The program is part of the World Association of Chefs Societies, based in Paris, France. Junior and Professional chef members from the B.C. association will prepare a special meal for the less fortunate from 11 a.m. until 1 p.m. on Dunlevy Street, adjacent to Oppenheimer Park in Vancouver. B.C. Chefs’ president Donald Gyurkovits commented, “We would like to recognize the generous donations from B.C. Produce Marketing Association, Cheemo Foods, International Herbs, Bosa Foods and all the local suppliers who donated foods and products to make this event a success.”

Howard Johnson Adds 56th Canadian Property in Toronto
Howard Johnson Canada, based in Oakville, Ont., has added a 56th Canadian property to its franchise group, the Howard Johnson Inn Toronto-Lakeshore. “We are pleased to increase our presence within the Howard Johnson brand,” explained Nina Kassam of Capital Safari Lodging Inc., which already operates the Howard Johnson in Sault Ste. Marie, Ont. “We are looking forward to expanding our relationship with the Howard Johnson Canadian family.”

Maple Leaf Foods Opens New $12M Innovation Centre
Mississauga, Ont.-based Maple Leaf Foods has opened its new $12-million, 25,000-sq.-ft, culinary innovation facility, ThinkFOOD! Centre. Described as “the only one of its kind in Canada,” president and CEO Michael McCain commented, “We’ve created an environment where all of our food innovators can work together under one roof in collaboration with customers and increase the speed-to-market for introducing exciting new food ideas from around the world.” Staffed with some 60 professionals, the Centre’s culinary amenities include several presentation kitchens, teaching and demonstration facilities, research labs, product development and sensory testing areas, simulated retail environments, trends resource library and a foodservice demonstration kitchen.


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