Newfoundland and Labrador Product Development Strategy

- 155 -to assess this. What occupancy rate is ‘high’, suggesting the need for more capacity? Andjust because occupancies are high in an area, are they high for long enough periods to suggestthat there is room for more capacity without negatively affecting the viability of otherproperties?In the second place, at what occupancy rates are properties viable; in other words, where isthe breakeven point? For a full service hotel, it has traditionally been seen that an averageannual occupancy of some 65% is needed to be viable. At the other end of the scale, whatabout a B&B that is essentially someone’s home that takes in guests on a seasonal basis? Inthis case it is probably a lucrative endeavour for the homeowner even if they only achieve a20% occupancy rate on a seasonal basis. And other property types and sizes will havedifferent breakeven points, depending primarily on the extent the investment and fixed costshave to be supported by room rentals, and to a lesser degree on whether regular staff arerequired versus how much the owner can do her/himself, and perhaps other factors as well. Ahotel that has a popular pub and a few rooms upstairs doesn’t really worry about sellingrooms, nor does a homeowner where junior is away and his room is being rented out in thesummer months.Occupancy rates need to be only one of the factors being considered.Criteria for Assessing Demand Generating Accommodation ProjectsFirst of all, it is be helpful to provide clearer definitions of expected property features for‘demand generating’ accommodations. We have provided suggested minimum numbers ofaccommodation units for the property to have sufficient critical mass to qualify as demandgenerating. The lists of features to follow below should be taken as examples of appropriatefeatures and not followed religiously:Multi Season Destination ResortImportant:o High quality natural location, preferably on the ocean, a lake or rivero Accessible by roado A minimum of 50 accommodation unitso All units have private bathrooms ensuiteo Residential-style accommodation units – large guest rooms, suites, chalets, cottageso Guest room amenities – fireplaces, lounge/sitting area, deck or patioo Minimum 3 star Canada Selecto On-site diningo Mix of indoor and outdoor recreational amenities – swimming pool, library, gamesroom, walking paths and quiet areaso Organized activities for guestso At least three seasons of operationSome mix of the following:o A golf course on site or nearbyTHE ECONOMIC PLANNING GROUP of Canada Newfoundland & Labrador Tourism Product DevelopmentD. W. Knight Associates Strategy and Accommodation Needs Study