Mar 8, 2021 | Industry News Tourism Industry
One year into the global pandemic Destination Canada research reveals impact of COVID-19 on Canada’s Visitor Economy and the role Canadians can play
Today, Destination Canada released new research and analysis that uncovers the scope of the impact to the tourism sector from COVID-19. The visitor economy saw unprecedented losses in 2020 and tourism continues to be by far the most threatened sector in the Canadian economy due to its service nature and current reliance on foreign tourists.
While recovery is forecasted to take years, Canadians can play a critical role in bolstering the tourism economy, creating jobs and supporting local businesses by keeping their tourism dollars in Canada. However, search data reveals that Canadians are showing a high interest in international travel this year, if safe to do so.
“We understand that everyone is eager for some much-needed vacation time and we are calling on Canadians to plan their future travel within Canada,” says Marsha Walden, President and Chief Executive Officer, Destination Canada. “We are all fortunate to live in this incredibly beautiful and diverse country with breathtaking experiences from coast to coast to coast—now is the time to plan on exploring our backyards when safe to do so. This is how each and every Canadian can enjoy our country while meaningfully helping the hundreds of thousands of people whose livelihoods enhance our quality of life in Canada.”
If Canadians shift two-thirds of their planned spend on international leisure travel towards domestic tourism, it will make up for the estimated $19 billion shortfall currently facing our visitor economy, help sustain 150,000 jobs and accelerate recovery by one year.
One in every 10 Canadian jobs is tied to tourism and the current struggle faced by the visitor economy creates a ripple effect across the entire job market, impacting the quality of life and well-being of all Canadians. Women, immigrants and youth, who make up the engine of the visitor economy, have been hardest hit by the impact of COVID-19 due to reduced operations, business closures and job loss.
“Canada’s visitor economy isn’t just a key pillar of our country’s economy, it’s critical to our collective quality of life. We all miss our favourite restaurants, our art galleries and our music and cultural festivals. We all rely on the airlines that connect us to friends, family and business colleagues, and bring the world’s products to our doorstep. It’s devastating to lose so many businesses and services in our communities,” adds Walden. “Canadians have the power to change this by spending their travel budget in Canada.”
Alongside rapid declines in tourism, the COVID-19 pandemic brought business events, entertainment and festivals to a halt; the combined impact resulted in massive losses to hotel revenues, with data showing that major cities have been hardest hit. Montreal, Toronto and Vancouver downtown hotels recorded the lowest occupancies of any region in Canada, with revenues falling an estimated 79 per cent in the last year, a loss of $2.3 billion across the three cities.
- If Canadians shift two-thirds of their planned spend on international leisure travel towards domestic tourism, it will make up for the estimated $19 billion shortfall currently facing our visitor economy, help sustain 150,000 jobs and accelerate recovery by one year.
- The current situation facing the tourism sector is the worst ever seen, more dire than the impact experienced after 9/11, SARS and the 2008 economic crisis combined.
- One in 10 Canadian jobs is tied to tourism (9.8%), with Small and medium-sized enterprises making up 99 per cent of businesses in Canada’s tourism sector, impacting Canadian livelihoods.
- Despite initial signs of recovery, tourism businesses continued facing significant financial stress resulting in business closures, some permanently, throughout the year. This resulted in a decline of 9 per cent in active businesses from January to November 2020—the greatest decline of all business sectors.
- Unemployment rates in the tourism sector remained the highest out of any sector, 6.6 per cent above the national rate at the end of 2020. The loss of core staff will hinder businesses’ ability to scale up efficiently, thus further impacting recovery.
- From April to November 2020, passenger air transport revenues collapsed, falling 91 per cent and accommodation revenues dropping by 71 per cent.
- Despite projected growth, current forecasting for 2021 still places tourism and related job growth in Canada more than 30 per cent below 2019 levels.
- While still significant, job loss was minimized by Government of Canada initiatives. Programs like the Canadian Emergency Wage Subsidy (CEWS) prevented the loss of an additional 131,100 jobs in Accommodation and Food and Beverages alone (at its peak in August 2020), and 264,000 jobs in the information, culture and recreation sectors (at its peak in July 2020). New additional programs such as the Highly Affected Sectors Credit Availability Program (HASCAP) have also been rolled out.
To learn more, please see Revisiting Tourism: Canada’s Visitor Economy One Year into the Global Pandemic report here.