Are We There Yet? The Precarious Road to Recovery for Tourism

On March 11, 2020 The World Health Organization (WHO) declared the COVID-19 outbreak a global pandemic. At that time more than 118,000 people had been infected over 110 countries and the virus was spreading rapidly across the globe. The impact of COVID-19 and its variants have caused and continue to cause unprecedented systemic changes to many industries and has fundamentally changed our way of life.

Governments around the world scrambled to impose unprecented restrictions on industry and their populations in an effort to contain the spread of the virus and its variants with debatable success. However, without question the politicalization of the pandemic has certainly caused tremendous damage to the global and domestic economies and have placed nations in exorbitant amounts of generational debt. One of the hardest hit industries by government restrictions and politicization has been the tourism industry.

In 2019 tourism made up approximately 6.5 per cent of Canada’s GDP. In fact that same year was an all-time high for tourism to Canada with just over 22 million visitors flocking to Canada and spending an average of $23 billion per quarter. Unfortunately a year later, as COVID-19 spread and governments took action, the tourism expenditure plummeted to $6.9 billion in the second quarter of 2020 marking the lowest level in tourism expenditure over the last 25 years.

Tourism Spending 2016-2021

Source: Statistics Canada

At first the startling drop was assumed to be very temporary, perhaps a couple of months, however, as the third year of this pandemic starts, temporary is no longer in the cards.

Statistics Canada continually monitors tourism and its related activities in Canada. Every quarter it publishes The National Tourism Indicators report (NTI). The NTI covers the domestic demand and supply of a variety of different tourism commodities, such as, transportation, accommodation, food & beverages, recreation & entertainment as well as the amount of GDP and employment that the tourism industry generates.

There are several different data sources that Statistics Canada draws up to make up the NTI. For example, The Canadian Tourism Satellite Account (CTSA) provides a coherent framework within which to integrate, reconcile, organize and analyse the variety of economic statistics that are relevant to tourism, both on the supply side (i.e., industry) and on the demand side (i.e., tourism). It is important to note that Tourism is not an explicitly identified industry within the statistical system as it cross-cuts several different industries. The CTSA serves to pull tourism’s
various components together and, as such, it explicitly defines the tourism industry within the statistical system. The annual levels for employment are calculated using data from the Labour Productivity Database and the Demand totals from the International Travel Survey (ITS).

The level of tourism also plays into the larger global community and goals set out in the 2016 United Nations Agenda for Sustainable Development. The UN’s Agenda is a 15-year transformation action plan to address the most urgent challenges the globe faces by 2030. The 17 sustainable development goals are a universal calls to action to end poverty, protect the planet and improve the lives and prospects of everyone, everywhere.

Tourism is part of the 8th goal, Decent work and Economic growth. According to the Agenda, the goal to achieve by 2030, is to devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products. Obviously, COVID-19 and its variants have put a wee wrinkle in this plan.

While governments start to ease pandemic restrictions in 2022 and start to allow the fully- vaccinated to travel for non-essential purposes, the tourism industry can start along the road to recovery. The Canadian tourism industry has slightly improved since the depths of 2020 with the third quarter of 2021 recording tourism expenditures of $13.5 billion, approximately half of what they were back in 2019.

However, the road to recovery will not be an easy one as COVID-19 variants continue to circulate and continued government restrictions remain in place. The past two years have permanently changed consumer behaviours and the views towards tourism with more and more people choosing other mode of travel or simply not to travel at all. Other factors that will need to be navigated is the acceleration of the great resignation and retirement, the rise of remote work and residential tourism.

With the continued uncertainty of COVID-19, along with the other factors in the road and the 2030 deadline approaching fast, the tourism industry has a bumpy road ahead.

All we can do is keep asking “Are we there yet?”