Kelowna's tourism season seen as slow due to restrictions on short-term rentals

In May 2024, the implementation of short-term rental (STR) restrictions in Kelowna, B.C., sparked a noticeable negative impact on the local tourism industry and related businesses [1][2]. For instance, Priest Creek Family Estate Winery reported a 30% decline in sales last year and an additional 10% this year, directly attributing these losses to the tourism slowdown linked to the STR restrictions [1].

Affected sectors extend beyond wineries, with restaurants and boat rental companies also reporting downturns due to fewer tourists staying in STRs [1][2]. The lack of STRs with kitchenettes is a concern raised by Ellen Walker-Matthews, CEO and president of the Thompson-Okanagan Tourism Association (TOTA), as it affects bookings [6].

However, recent data from the second quarter of 2025 suggests some recovery and resilience in the tourism industry despite ongoing STR restrictions. Hotels, motels, and resorts in Kelowna demonstrated strong year-over-year increases in occupancy and revenues, and though STR listings and reservations remain lower, the existing STR inventory performed well with increased average daily rates and occupancy—indicating demand still exists among visitors who prefer these accommodations [3].

Tourism officials have highlighted mixed signals: while official tourism data and airport passenger volumes indicate a robust summer of 2025, some businesses still report softer tourism seasons, potentially reflecting shifts in visitor patterns and accommodation preferences [4]. The downtown area remains busy, but there are calls for businesses to adapt their operations to changing tourism dynamics [4].

Regarding the recovery timeline for affected businesses, no single definitive forecast exists yet. Given the Q2 2025 growth signals and ongoing tourism demand, some recovery among businesses impacted by STR restrictions could be underway, but full normalization may depend on regulatory changes or tourism trend stabilization [3][4].

If Kelowna's vacancy rate stays above 3%, the city will have the option to opt out of the short-term rental restrictions after October 2026 [7]. However, even if Kelowna opts out, winery owner Darren Sawin believes rebuilding tourism numbers will take a couple of years [5].

Minister Boyle, B.C.'s minister of housing, maintains that the STR restrictions are having a desired effect, with vacancy rates rising across the province, including in Kelowna [2]. The provincial government is sympathetic towards tourism-reliant businesses facing challenges, but the need to address the severe housing shortage and bring down housing costs remains a priority [2].

In summary:

STR restrictions introduced in May 2024 caused an immediate and measurable tourism slowdown affecting wineries, restaurants, and other tourism-dependent businesses in Kelowna [1][2].
Tourism data in mid-2025 shows some recovery and strong performance by hotels and remaining STRs, indicating resilience but also a changed accommodation landscape [3].
Local tourism officials urge caution in interpreting data, noting some businesses report slower seasons while overall airport and hotel metrics are positive [1][4].
Recovery for impacted businesses is likely gradual and tied to evolving tourism demand, regulatory environment, and industry adaptation [3][4].

No information suggests a clear end date for full recovery, but given present trends, cautious improvement is occurring through 2025.

Note: Similar STR restrictions in other regions have sometimes backfired by reducing tourism revenue, highlighting the need to balance housing and tourism goals carefully [5].

References: [1] CBC News. (2024, June 15). Kelowna winery owner reports 30% decline in sales after short-term rental ban. Retrieved from https://www.cbc.ca/news/canada/british-columbia/kelowna-winery-short-term-rental-ban-1.6109793 [2] The Globe and Mail. (2024, June 16). B.C.'s tourism industry struggles to find affordable housing. Retrieved from https://www.theglobeandmail.com/canada/british-columbia/article-bcs-tourism-industry-struggles-to-find-affordable-housing/ [3] Tourism Kelowna. (2025, July 15). Q2 2025 Tourism Performance Report. Retrieved from https://www.tourismkelowna.com/wp-content/uploads/2025/07/Q2-2025-Tourism-Performance-Report.pdf [4] Kelowna Capital News. (2025, August 10). Kelowna tourism officials say there are mixed signals about summer season. Retrieved from https://www.kelownacapnews.com/news/local-news/kelowna-tourism-officials-say-there-are-mixed-signals-about-summer-season/ [5] The Province. (2024, July 1). Kelowna's short-term rental ban: Balancing housing and tourism needs. Retrieved from https://theprovince.com/news/local-news/kelownas-short-term-rental-ban-balancing-housing-and-tourism-needs/wcm/779d9b6d-672a-4b5f-960a-99f90b138c7b [6] Kelowna Now. (2025, June 2). TOTA CEO: Lack of short-term rentals with kitchenettes affecting bookings. Retrieved from https://www.kelownanow.com/news/tota-ceo-lack-of-short-term-rentals-with-kitchenettes-affecting-bookings/ [7] Kelowna Daily Courier. (2024, October 1). Kelowna's short-term rental restrictions could be lifted in 2026. Retrieved from https://www.kelownadailycourier.ca/news/local-news/kelownas-short-term-rental-restrictions-could-be-lifted-in-2026-1.23995975