A new report by the World Travel and Tourism Council finds that Canada’s travel and tourism sector is poised for major recovery this year and is within sight of its previous peak in 2019. If achieved, the activity would furnish some 90,000 more jobs to reach 1.64 million this year, recovering nearly all the travel and tourism positions scrapped during the COVID-19 pandemic.
The WTTC says the industry is set to contribute $162.6 billion to the Canadian economy in 2023, up more than 17% from last year and the $173.9 billion posted in 2019.
Last year, spending from overseas travellers bound for Canada ballooned by 64% to $23 billion, the report said. Council president Julia Simpson said the trend is likely to continue, bringing the expected total this year closer to 2019’s $43 billion.
Simpson, who heads the council representing more than 200 companies, says a return of overseas visitors to Canada’s biggest cities will fuel the comeback.
“The sector is a vital driver of economic growth and job creation in Canada with cities such as Vancouver, Toronto and Montreal remaining must-see global destinations for international visitors,” she said. “As overseas visitors continue to return to Canada, we will see international visitor spending recovering quickly, to reach 2019 levels in the coming years.”
Beth Potter, who heads the Tourism Industry Association of Canada, said she expects domestic tourism spending to match pre-pandemic levels this year, but overseas visitors may not reach that peak until 2025. Business-related tourism likely won’t fully recover until 2026, she said.
“There’s an awful lot of change in the way that we do business – certainly a lot more use of (virtual) technology. But also, when you’re booking those big conferences and trade shows, those events are booked multi-years out,” Potter said.
Business-related tourism event bookings for this year are at 47% of pre-pandemic levels, she said.
The biggest challenge facing tourism operators is labour, with some 300,000 jobs likely to go unfilled this year, Potter said, adding that higher interest rates remain a major thorn as well.
“Most of these businesses took on debt during the pandemic through things like the CEBA loan,” Potter said, referring to the federal government’s Canada Emergency Business Account for small businesses. The loans of up to $60,000 were interest-free but will carry a 5% interest rate starting Jan. 1, 2024.
In 2019, overall tourism spending – on everything from airlines and hotels to bars and festivals – reached about $105 billion, Potter said.
“Tourism is important to every community in our country. It’s not something that is only centred around iconic destinations or big cities,” Potter said.
What does the next decade look like?
The WTTC is forecasting that the sector will grow its GDP contribution to more than $238 billion by 2033 to reach 7% of the Canadian economy and will employ almost 2.1 million people across the country, with one in 11 Canadians working in the sector.