Downtown Vancouver pedestrian traffic and transit ridership recovery lagging

Apr 28 2022, 4:35 pm

Some signs point to an eventual recovery in the vitality of downtown Vancouver, but how long it will take to return to pre-pandemic 2019 is anyone’s guess.

Major city centres in North America’s largest regions continue to be significantly impacted by the pandemic, and downtown Vancouver is no exception from the blunt impacts that are still being felt.

A newly released annual report by the Downtown Vancouver Business Improvement Association (DVBIA) for the “State of Downtown” in 2021 states the indicator of a pedestrian traffic recovery is still well below pre-pandemic levels.

The central business districts of downtowns typically see much of their foot traffic from the high concentration of office workers, but the Omicron and Delta coronavirus variants put a real damper on the return to the office workplace, instead extending and further ingraining work-from-home arrangements.

Downtown Vancouver’s office foot traffic in 2021 throughout much of 2021 was only about 30% of the pre-pandemic baseline, according to commercial real estate firm Avison Young’s Office Vitality Index. The lowest level was 17.3% on the week of September 13, 2021, while the highest was 56% on the week of March 8, 2021.

Even for office foot traffic in April 2022 to date, the index shows downtown’s volumes are 75% pre-pandemic volumes.

The depressed office foot traffic activity was also reflected in TransLink’s ridership within downtown Vancouver. Between September and October 2021, the SkyTrain stations in the city centre saw 42% of the weekday ridership they recorded in the same period in 2019, 53% of Saturday ridership, and 55% of Sunday/holiday ridership. These rates are generally lower than the region as a whole.

The DVBIA also cited a survey conducted by Research Co. in January 2022 that found 38% of BC workers who worked away from their usual workplace had not heard anything from their employer about plans to either return to the office or continue working remotely. Furthermore, only 11% of workers who have worked at home expected a full return to the office, and 75% of workers expected to be able to work from home at least one day a week.

But downtown Vancouver is performing relatively well some indicators, leading other major city centres in the country.

“We’re incredibly hopeful and excited about the recovery of our city. People are coming back to Downtown Vancouver faster than any other downtown in Canada,” said Nolan Marshall III, president and CEO of the DVBIA.

Despite the lower office foot traffic levels, there is still strong confidence in downtown’s office market, fuelled by the continued robust growth of the city’s tech industry. After a negative absorption of office space in 2020, downtown saw positive absorption of 174,000 sq ft in 2021 — the highest annual absorption since 2018.

Downtown Vancouver still has the lowest office vacancy rate of any major city centre in Canada and the United States, hovering at 8.1% by the end of 2021. New office space that began construction before the pandemic, much of it now pre-leased, will reach completion starting this year, with 3.3 million sq ft to be ready between 2022 and 2024, including 980,000 sq ft in the first half of 2022. Another 2.1 million sq ft of office space is set for completion in 2026.

Although there are still major challenges, retail is another strong indicator. Vancouver’s retail recovery has performed better than other major Canadian markets, with retail sales in 2021 up by 14% compared to 2019 and 25% compared to 2020.

“Visitors are returning downtown to eat, drink, shop and attend events,” said Marshall.

With that said, while there is a growing demand for retail space, the report states this demand is mainly centred in the suburbs.

As for restaurants and bars, two years of health restrictions that forced these establishments to shut down or operate at significantly reduced capacities have had a lingering effect, with many businesses still struggling to stay open.

But with health restrictions now a thing of the past, the concern is now turning to the poor labour market. A shortage of workers is limiting operations, and forcing an upward pressure in wages, which is driving increased operating costs and contributing to inflation when costs are passed on to customers. It is estimated that BC’s hospital industry had 30,000 fewer workers in 2021 compared to pre-pandemic levels.

Significantly fewer events in downtown also contributed to decreased foot traffic and activity for businesses in the first two years of the pandemic, but there has been a resurgence in events in 2022 to date.

For instance, the Vancouver Convention Centre’s  500 events alone in its 2019-2020 fiscal year attracted over one million people to downtown.

Hotel occupancy recovered to 40% in 2021 from 29% in 2020, and the current restart of tourism — including the return of cruise ships to Canada Place — is anticipated to provide a bump for 2022.

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