Tourism industry may have to live off domestic travel until the fall, says minister

The tourism and hospitality sector has been among those most severely affected by the pandemic. With uncertainty over the Omicron variant persisting, the federal minister responsible for the industry said the return of international travellers could still be a long way off.

"During the darkest days of the pandemic, Destination Canada, which normally takes its money and markets Canada to the rest of the world, took that money and marketed inside Canada, to travel," Tourism Minister Randy Boissonnault told CBC News.

"I think to at least [the third quarter] of 2022, we're going to have to see more of that."

In Canada, domestic travellers account for 78 per cent of tourism spending. But international visitors spend an average of $1,047 per trip, while domestic vacationers spend less than a quarter of that.

"Domestic travel is a crucial step to getting our industry back up and running but [it] will not be able to fill the revenue gap from the halt of international travel," Beth Potter, president and CEO of the Tourism Industry Association of Canada, told CBC News. 

The sector has contracted by more than 50 per cent over the course of the pandemic, falling from a $105 billion-a-year industry before the pandemic to one worth about $53 billion now. That's a drop of 40 per cent in domestic spending and 87 per cent in spending by international visitors.

Industry stakeholders like Potter say that the sector faces three significant challenges over the next year. The first is simply to survive until visitors return. The second is the impact of ongoing restrictions on travel, while the third is a labour shortage brought on by the pandemic.

In 2020, as the country locked down and the border shut to international travellers, the tourism sector was forced to lay off 43 per cent of its workforce — about 900,000 jobs, according to Destination Canada, the former Canadian Tourism Commission.

Some of those jobs have since returned but over the first ten months of the year, the industry's workforce remained 360,000 shy of the number it employed before the pandemic. 

"We had to lay off many of the workers that we did have and many of them will not come back," Susie Grynol, president and CEO of the Canadian Hotel Association, told CBC News.

"They won't come back, not because their heart isn't in hospitality but because we are still, 19 months later, not in a position to hire back every single worker because now we find ourselves in the off-season."

Industry insiders say that the labour shortage is not being driven solely by slack short-term demand that will correct itself once borders reopen — that it represents a permanent move away from the sector by key workers.

"Our industry has suffered some reputational damage because people see us as unstable because we have been subject to so many restrictions," said Beth Potter, president and CEO of the Tourism Industry Association of Canada. 

"We have actually lost employees. They have told us they will not come back to the industry because they don't see our industry as a stable place to continue their career."