It could take another three years for Ontario’s tourism industry to recover from the COVID-19 pandemic, a major new study says.
A report from The Tourism Industry Association of Ontario and the Ontario Chamber of Commerce, released today, calls for sweeping changes, including keeping the Ontario staycation tax credit, boosting cannabis tourism, providing better train and rapid transit service, giving indigenous tourism a push, and boosting affordable housing for workers.
The study says tourism businesses in Canada’s most populous province are generating less than two-thirds (64%) of the revenues they saw in 2019, and that 70% have taken on debt to stay afloat. Of those who have borrowed money, 20% have amassed debts of $100,000 or more.
The report says only four in ten tourism operators expect to make money this year, which means 60% don’t expect to net any profit at all.
“With the onset of the COVID-19 pandemic, Ontario’s tourism industry was one of the hardest hit—and it will be one of the last to fully recover and rebuild. The crisis continues to have a severe and enduring impact on the tourism industry in Ontario. Border closures, capacity restrictions and lockdowns exacerbated structural issues that have left the industry far from recovery,” the report states.
“Ontario’s tourism industry is a vital contributor to the economy, representing $36 billion of the province’s GDP,” the study says. “While domestic and inbound travel improved in the latter half of 2022, the industry is not expected to recover from the pandemic until 2025.”
Across Canada, the tourism industry accounts for roughly one in ten jobs.
Daniel Safayeni, vice-president of policy at the chamber of commerce, said a variety of changes are needed at the provincial level to turn the Ontario tourism ship around.
“The potential of this industry will not be reached until both some of the immediate challenges get addressed, but then also the more structural challenges as well that are prohibiting the growth, not only of the tourism industry, but many industries that have been perhaps disproportionately impacted by COVID,” he said in an interview that appeared in the Toronto Star.
“Land border crossings are still at only 50.8% of normal travel volumes, illustrating the extent to which border restrictions have stymied U.S. travel to Ontario,” the report states. “For border-adjacent destinations dependent on the ‘rubber tire’ tourism market, the financial impact is staggering.”
The study says Americans make up about 35% of visitors to Niagara Falls, but about 50% of tourism revenue.
The zipline in Niagara Falls, Ontario. JIM BYERS PHOTO
“With American and long-haul international visitors (e.g., from Asia, Europe) likelier to visit and spend at multiple sites, these visitors have higher per capita spending than domestic visitors,” the study states. “However, U.S. visitation is currently at less than half of 2019 numbers and long-haul international markets have barely returned at all.
The study also notes that the recovery of northern Ontario tourism sectors is taking place at a much slower rate than the rest of the province. As of summer 2022, US arrivals were at only 25-33% of what they were pre-pandemic.
Business travel, including transient travel and meetings and conventions, also has been far slower to return. That has had a “disproportionate effect on major urban centres,” mostly Toronto and Ottawa.
The study also highlights the potential for Indigenous Tourism in Ontario.
Prior to COVID-19, Indigenous Tourism was the fastest growing tourism sector in Ontario, with one in three international visitors to Canada expressing an interest in Indigenous tourism experiences,” the report states. That provides an opportunity to create “innovative, sustainable tourism offerings that engage in intercultural exchange” for both Indigenous and Francophone Tourism.
Other areas for growth include cannabis tourism, agritourism, and sports and film tourism.
Rawley Resort, Spa and Marina in Port Severn, Ontario. JIM BYERS PHOTO
The report’s authors make a number of recommendations, including better promotion of Ontario at a local, national and international level and making the Ontario Staycation Tax Credit an annual program. It’s also important for governments to invest in cross-regional transit and improve regional transit access to Toronto Pearson Airport. High speed rail service also is important for Ontario, as is visitor access to high-speed Internet.
Affordable housing also is a big issue, as is more freedom to travel across the border.
“For travelers wishing to travel between the United States and Canada, enrollment and renewal of NEXUS status has been made difficult as a result of the COVID-19 pandemic. NEXUS is a bi-national, Canada-U.S. program that plays a key role in facilitating frequent travel between Ontario and the U.S.. NEXUS enrollments were closed during the pandemic and have yet to reopen in Canada, and more than 500,000 applicants are on a waitlist.
“This creates a significant barrier for travelers,” officials said.
–
