Business Examiner | Wickaninnish Inn Riding High Over The Waves
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Original article by Mark Macdonald for Business Examiner
When Charles McDiarmid and the McDiarmid family proposed the idea of “storm watching” a number of years ago as a unique way to attract new off-season tourists to Vancouver Island’s wild west coast, they didn’t realize they would also be speaking about the future of their own Wickaninnish Inn.
While storm watching has become a major reason why visitors continue to flock westward during inclement weather, the award-winning property has also endured storms not of its own making: The 2009 economic downturn. Two-plus years of Covid Pandemic closures and restrictions. Four years of closures and delays on the Kennedy Lake portion of Highway 4, the only road into the West Coast.
Not many people believed Charles’ storm watching idea was a winner, including almost everyone in their home town of Tofino. They just felt that since their family enjoyed watching big storms, others would as well.
“I wouldn’t say the first winter season started like a house on fire. It took a while,” he states, although it has dramatically, positively affected occupancy rates in the traditionally slower winter months. “We average between the mid-60’s and 70 percent November through March now, which is pretty strong, and people come to visit throughout the entire year.”
A combination of good management, structure and strategy enabled the Wickaninnish Inn – the only local family-owned and managed major property in Tofino – to maintain its status as a premier destination through external economic forces that brought many hospitality companies to their knees. Their efforts were recognized at the January 26 MNP LLP Business Excellence Awards in Nanaimo, winning the 2023 Hotels, Motels & Inns Business of the Year Award.
The Wickaninnish Inn is a spectacular resort, surrounded by 100 acres of ancient forest on the northernmost part of Chesterman Beach. It has 75 rooms and suites, and its Ancient Cedars Spa and The Pointe Restaurant have helped the property earn numerous awards, including an annual placing on Travel + Leisure World’s Hall of Fame list.
The Inn is one of only four B.C. properties that have membership in the prestigious Relais & Chateaux Association, and that designation is a magnet for tourists from Europe – primarily England, Germany and France – and across North America.
In a typical year during peak season from May to September, about 30% of Wickaninnish visitors are from Canada, with 30% from Europe, and 35-38% from the United States.
From October to April – storm watching season – 85% come from Canada, mostly from the lower mainland, followed by 15% from Washington, Oregon and California.
In The Beginning
The Inn was conceived by Charles, his brother Bruce, and their father Howard on land Dr. Howard McDiarmid purchased after he moved to Tofino in 1955 to oversee Tofino General Hospital. Howard, who also served as MLA for the provincial Alberni-Clayoquot riding from 1966-1972, had to be convinced that the Wickaninnish Inn was viable.
Since three of the most important words in the hospitality industry are location, location, location, the McDiarmid family knew they had that. It was just a matter of what exactly to build on the family acreage on which the Inn sits – as this was the exact site Howard had in mind.
Charles was the main driver. He earned a degree at Cornell University’s School of Hotel Administration, which was followed by 14 years working for Four Seasons Hotels & Resorts chain all over North America. In 1992 he completed the business plan for the Inn, which opened in 1996.
“I did all the research myself,” he recalls. “I needed to know everything. I presented it to my father, and he said ‘Charles, nice business plan, but we’re land rich and cash poor. If you want to build this, you’ll have to go out and find financing’.”
Off to Vancouver he went, searching for investors.
Charles shares that when they first went looking for financing, they went to the Federal Business Development Bank (now Business Development Bank of Canada) who told him that in order to obtain a loan, “we needed three signatures from chartered banks stating they were declining to lend the money first. Those were the three fastest signatures we’ve ever had to get.
“On Howe Street, everyone has money, but it’s a question of how many limbs you have to give up to get it,” he laughs, in retrospect. “I found some, plus the project was also structured as a Venture Capital Corporation, so investors got a 30% tax break in year one.”
The McDiarmid’s contributed the land and were 50-50 partners with the investors, who over five years, doubled their money with 20% annual returns. The McDiarmid’s bought them all out in 2001, thanks to RBC Royal Bank, who also helped fund remodeling and renovations during the three slower years that followed the 2009 recession. That positioned them to watch the business grow solidly since 2012.
“My father was very cautious,’ Charles notes, looking back. “He said ‘let’s build a motel’, and he didn’t want to include a restaurant because he viewed this aspect as too risky. Dad was outvoted 4-1 by the other family members, and I think he wanted to cast the one negative vote just so he could say so if it went sideways.”
Howard passed away in 2010, but Charles knew he was proud of the Inn’s success.
“He was so thrilled and got to see the success and the reputation we have earned.”
Navigating The Covid Pandemic
During the Covid Pandemic that started in 2020, Charles and his wife Kari-Anne, who handles administration and “finishes his sentences”, decided to close the Wickaninnish Inn for seven and a half months, November 2020 to June 2021.
“We were the first place to close and the last to open,” Charles points out. “My father had a saying: ‘It’s a good thing we don’t get all the government we pay for’. Yet I tip my hat to the federal and provincial governments that provided support during the pandemic.
“We provide 100 beds for staff housing, and we provided complementary rent for them during the pandemic while we were closed. We kept 30% of our workforce employed and took the opportunity to do projects around the Inn. When we reopened, we suffered, too, and we were short-staffed, especially in the kitchen. It was a herculean effort for our staff: 15 hours a day, 6-7 days a week. It was brutal, but we made it through.”
Looking back, McDiarmid had an inkling Tofino would do relatively well during the pandemic due to its destination reputation.
“I was watching a man on the street interview on TV one day with people in Vancouver, and they were asking them: ‘Where are you going to go when you can travel again following the pandemic?’ 70% of the people interviewed said they were coming to Tofino. We had so many people who came here that said this place is amazing.
“Here we sit, looking out at the largest ocean on the planet, old growth forest behind us, with rich Indigenous history, surrounded by national and provincial parks, and the protected waterways of Clayoquot Sound that are unbelievably pristine,” McDiarmid muses. “When you think of all those components together, it’s a very fortunate and magical combination.”