The viability of rural hotels in Saskatchewan

Railway & Main

Joan Chase

While hotels are one of the oldest and most common forms of business enterprise in small-town Saskatchewan, in most cases, they are hotels in name only. They do not rely on room rental for revenue. The rural hotel business is all about the beverage room. The sale of alcohol – mainly beer – is the primary source of operating revenues for small-town hotels.

Since the 1970s, beverage rooms have been continuously renovated. Steak pits and other amenities have been added, and a wide variety of entertainment – shuffleboard tables, pool tables, karaoke machines and live bands – have been featured in bars across the province. In 1993, the VLT program was introduced, providing an additional source of entertainment – and revenue – for liquor-permitted hotels in rural communities.

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Up until recently, small-town hotels needed to have a minimum number of guest rooms in order to qualify for a liquor license. According to Sean Kenny’s report for the Saskatchewan Liquor Board, Viability Study of the Rural Hotel Industry in Saskatchewan (August 1987), licensed hotels in communities with less than 200 taxpayers had to have a minimum of seven rooms. Even at that, the hotels in these small towns had an occupancy rate of only 10 per cent. Kenny estimates that only about two per cent of total rural hotel revenue came from the provision of accommodation.

On June 22, 1988, Graham Taylor, Saskatchewan’s minister of Tourism and Small Business, told the Saskatchewan Legislature that he did not see why it was necessary for rural hotels to have rooms. “The day of the rooms in the rural hotel, I think, in many cases has somewhat passed,” Taylor said, “and therefore it may be an advantage to hoteliers to not have it [the liquor license] tied entirely to rooms.” 

As recently as 2009, the Saskatchewan Liquor and Gaming Authority’s Commercial Liquor Permittee Policy Manual stated that a licensed hotel beverage room in a rural community must have a minimum of six guest rooms. On Nov. 20, 2012, the Saskatchewan Party government unveiled sweeping changes to the provincial liquor laws and regulations that put rural hotels at risk. The list of 70 changes that came into effect in the spring of 2013 included the elimination of a minimum guest room requirement. In the words of Murray Mandryk, columnist for the Regina Leader-Post, “We're finally dispensing with the quaint prairie notion that only rural hotels with rooms (regardless of how dilapidated) should be allowed to sell off-sale.” (Nov. 12, 2012)

One of the 70 changes included “allowing strip-tease performances and wet clothing contests in adult-only liquor-permitted premises.” The first venue in the province to feature strip-tease entertainment was the bar in the hotel at Codette, a village 260 kilometres northeast of Saskatoon. After the first stripper show was held at the Codette Hotel and Bar on Jan. 2, 2014, owner Bryan Baraniski told the Saskatoon StarPhoenix it was a success. “We had a full house. Everyone had a good time,” he said. “It’s just a different sort of entertainment. We used to bring in bands and now we’re bringing strippers instead of bands.”

Codette Hotel’s stripper shows were short-lived. On March 25, 2015, Brad Wall, Premier of Saskatchewan, announced that the government had made a mistake when it allowed licensed strip clubs in the province and reversed that decision. “If by this decision we have inadvertently allowed for even a marginal increase in the chance for human trafficking, it’s the wrong decision,” Wall told the Regina Leader-Post.

Of greatest concern for rural hoteliers, however, was and is the new regulation that allows businesses other than hotels to obtain a license to operate off-sale liquor outlets. Of all the changes, this one has the most potential to cause the demise of small-town Saskatchewan hotels – businesses critical to many rural communities. Sustained largely by beverage room revenues including VLT income, most of Saskatchewan’s small-town hotels are now just a shadow of their former glory days.

© Copyright Battlefords News Optimist