| Domestic leisure travel in Canada will soon be back to pre-pandemic levels, says a new report from Destination Canada. But international and domestic business travel aren’t expected to recover for a few more years.
Here’s a synopsis of the report.
As of spring 2022, with borders open to fully vaccinated travellers and health measures less restrictive in all parts of the country, revenues are forecast to grow to between $80 billion and $85 billion in 2022.
Recovery will be uneven, with resort communities performing well, while rural and urban centres that are more dependent on international guests and business travellers may see slower but steady improvements. With about half of industry revenues flowing from Toronto, Montreal and Vancouver, growth in our major urban centres will greatly impact our overall industry performance metrics.
There are many factors that challenge the short-term recovery and long-term health of the sector, including: constrained labour supply; intense competition; volume management issues at visa centres and borders; restarting air transportation routes and access; supply chain gaps; investment conditions for real estate development; limited private sector innovation and investment in new tourism experiences; comparatively few major, long-term investments in developing destinations; underdeveloped digital maturity among small- and medium-sized tourism operators; insufficient digitalization across the customer journey and use of data; complex policy and uncertain land use rights in some jurisdictions; multi-level government policy responsiveness to ever-changing market conditions.
Tourism continues to lag other sectors in recovering its workforce. As the sector re-opens for 2022, more than 172,000 jobs remain unfilled.
While the shortage of frontline workers is a current concern of the tourism sector, labour experts have stated that the tremendous drain of management talent and industry knowledge will be the more significant issue facing the sector in the mid- and long-term.
Domestic expenditures for leisure travel are rebounding strongly and are expected to recover by the end of 2023.
International expenditures are expected to demonstrate steady growth over the 2022 to 2025 horizon. We forecast that the strongest near-term opportunity will be in the United States. France, the UK, and Germany are also showing immediate strength. We anticipate slower growth from our Asian markets, especially from China. Growth from Australia and, particularly, Mexico has been robust as air routes are re-established.
 Kluane National Park in the Yukon. JIM BYERS PHOTO Business travel for meetings and events by both Canadians and international travellers is not expected to fully recover before 2026.
The invasion of Ukraine by Russia is a significant geopolitical crisis that has imposed considerable disruptions on the global economy and introduced varying doses of uncertainties to the tourism outlook. While Ukraine and Russia represent less than 0.2% of international arrivals to Canada, indirect consequences of the war on the global economy, air connectivity, intercontinental travel and travel sentiment have the potential to be far reaching.
Gaps in the tourism supply chain continue, affecting everything from rental car inventory to attraction closures, from hotel supplies to airline routes. These gaps will hamper recovery as well as impact the guest experience.
The use of online platforms and the pace of technology adoption has accelerated greatly during the pandemic. Adoption of digital tools and access to data, both publicly and privately held, is increasingly important. We know travellers throughout the world rely heavily on online resources for researching, planning, booking and sharing their travel adventures. To improve the guest experience and business productivity, Canada’s tourism sector must elevate its digital literacy and maturity.
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