This report from Omnigence Asset Management, featured in STAY Magazine, explores the growing risk of stagflation in Canada and its implications for the hotel industry.
Excerpt:
Rising inflation, energy costs, and demographic shifts are compounding operational challenges, particularly as stagflation risks heighten economic uncertainty. These forces tie back to earlier discussions on strategic investments, as hoteliers must balance immediate financial opportunities with long-term resilience. The next section explores how the industry can navigate these pressures through targeted strategies in efficiency, workforce planning, and sustainability to secure future growth.
As Canada’s economy faces the forces of rising inflation and sluggish growth, and the threat of tariffs on Canadian goods by the U.S., Canada may enter a period of stagflation. A report from Omnigence Asset Management, “Is Canadian Growth Dead? Preparing for Stagflation and the Socio-Economic Barbell,” provides an analysis of the economic pressures that could shape the next three decades. These include housing shortages, increasing energy costs, a declining middle class, and stagnating real GDP per capita. Canadian hoteliers, already dealing with evolving consumer behaviour, must now adapt to this new economic landscape.
Pressures on hospitality operations
The report highlights how Canada’s housing supply deficit—estimated at more than 3 million units—has created ripple effects across the economy. For the hotel industry, this shortage impacts workforce housing, particularly in urban and remote regions where staff accommodations are critical. Combined with Canada’s population growth rate, which is among the highest in the developed world at over 2.7 per cent annually, this exacerbates demand pressures without sufficient infrastructure to support it.
Energy costs have also risen dramatically, nearly tripling as a share of GDP compared to historical averages. These higher expenses directly affect hotel operations, from utilities to transportation. Omnigence notes that energy prices now consume 8 per cent of GDP, compared to a long-term average of 4 per cent—a stark reminder of how external costs can disrupt profitability.View Full Report