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Jesse Davidson

Casa Queen Hotel Now Operating...Finally!



We are very excited to report that after a long and arduous process, we have finally received clearance from the City to begin operating our hotel at 1364-1370 Queen Street East. If you click here, or on the image above you can see the hotel's listing at booking.com.


You might recall from previous reports that for most of the period from late 2019 to early 2022 we had been allocating almost all of our free cash flow in the LP to the buildout and furnishing of the hotel's four suites. When we were finally ready to begin operating in May of 2022, we submitted an application for a Hotel Tax Registration with the City. Shortly thereafter, we were told by the City that they would be conducting a review to verify that we are permitted to operate a hotel at this location. After having received extensive advice during the past few years from our municipal lawyers, planning consultants, building code consultants and fire code consultants, we were very confident that we would ultimately be permitted to operate a hotel here. However, after a couple months, the City completed its review and told us we would not be able to operate a hotel at this location without obtaining a building permit to change the use. This would have added substantial costs and time to our plans. After months of back-and-forth dialogue with the City, our consultants and lobbyists were able to convince the City to obtain an internal legal opinion about our application. The City's counsel immediately confirmed that our interpretation was correct and we were granted the Hotel Tax Registration at the end of November, 2022.


We immediately began operating only to have our listings on Airbnb.com blocked by the City's Short Term Rental department after only a few days. As we've mentioned in previous reports, the City's new Short Term Rental By-Law only permits Short Term Rentals in an individual's principal residence and only for a maximum of six months of the year. The new department that enforces these rules has an automated system that is constantly instructing Airbnb.com to shut down listings that are not properly licensed with the City. Even though hotels are exempted from this By-Law, it still took us another four weeks of lobbying, with all hands on deck, to get them to figure out how to unblock our listings. Through this process, we have developed good relations with a number of the people working in both the Short-Term Rental enforcement department and the Hotel Tax Registration department. This proved to be a very valuable resource to have in early January when our listings were blocked a second time. This time we had our listings unblocked within a couple of hours.


The reason I'm telling this story in such detail is that it demonstrates the difficulties and barriers to entry for others who may want to circumvent the Short-Term Rental prohibition on professional operators. In 2023, we intend to utilize our competitive advantage in this space to convert most of our other residential apartments (of which many are currently running monthly furnished rentals) to mini hotels. In some cases, we will need to obtain a minor variance from the Committee of Adjustment to permit commercial use slightly in excess of the current zoning for the property. Our consultants believe these will be relatively routine variances to obtain, however, it will probably take most of the year to complete the process.


In January and February, which are typically the weakest months of the year in the hotel business, our sales have been great and we have been receiving good reviews on all the platforms. Our newly hired manager believes we are on track to approximately double the income we had been receiving from regular residential tenancies and monthly furnished rentals (on an annualized basis). The Casa Queen Hotel is currently one of the only hotels in the Leslieville/Beaches neighbourhood and offers apartment style amenities which are hard to find elsewhere. Because individuals who operate short-term rentals can only operate for six months of the year, most of them choose the summer travel season to list their units. As a result, there is an even greater shortage of short-term rental units available in the City during the winter months. Because we are exempt from this policy as a hotel and are able to operate for twelve months of the year, there is greater demand for our units in the offseason than would normally be expected.


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