The tourism industry will probably not have regained all the lost ground until next year, predicts Destination Canada, even if the recovery is already more vigorous than expected.
In a new report, the Crown corporation anticipates that the number of overnight leisure and business visits to the country will be 2% lower in 2023 compared to 2019 thresholds. Projections predict that in 2024, this number will exceed pre-pandemic figures by a hair.
Destination Canada, which promotes tourism across the country, said nominal spending in the sector will reach $109.5 billion in 2023, surpassing 2019 thresholds of about $105 billion.
The total for this year, however, has been fueled by inflation and is expected to reach about $122 billion to match pre-pandemic spending in constant dollars, according to the Bank of Canada’s inflation calculator.
“Spending has, obviously, been supported by inflation,” admits Meaghan Ferrigno, head of data and analytics at Destination Canada, in an interview.
Measured in real value, revenues from the tourism industry may not reach those of 2019 for two to three years, she adds.
A positive point is the importance that many still place on travel, even if interest rates put more pressure on disposable income.
“Travel remains a key priority for consumers. Even in today’s economic climate, international consumers are dedicating a larger portion of their wallets to experiences rather than goods. This is what really supports the recovery,” says Ferrigno.
The report estimates that the tourism sector has the potential to reach $160 billion, annually, by 2030. “Capacity constraints,” however, could limit this total to $140 billion, “which, when adjusted for ‘inflation, represents no real growth’.
Attracting wealthier tourists, recruiting workers and welcoming more visitors outside of peak season would all help the industry grow, adds Marsha Walden, president and CEO of the organization. . “This is a truly pivotal moment for our industry,” she said in a statement.
“Together, we can achieve what is possible and regain our place among the world’s leading tourism destinations, while being a source of prosperity and well-being for Canada as a whole. »
The projected annual growth rate of the tourism sector is almost 6% until 2030, which is expected to be higher than economic growth in Canada, according to the report. On the other hand, this pace seems slow when we take into account global tourism revenues which are expected to increase by more than 7% per year.
“Other countries have really upped their game, and Canada hasn’t kept pace,” notes Ferrigno, citing public and private investment in tourism in other G7 countries.
Despite everything, she highlights that Canada remains among the main long-haul destinations for five of its key markets: the United States, the United Kingdom, Mexico, France and Germany.
The state-owned corporation said leisure was the main driver of the travel industry over the past two years, reaching pre-pandemic levels in 2022 with $72.4 billion in revenue. Now, business travel is finally beginning its recovery, an essential part of filling hotels, restaurants and conference centers outside of peak season.
“We see avenues favoring recovery for next year, but the events will take place, in fact, in two or three years,” nuance Ms. Ferrigno. “That’s where you see a bigger turnaround. »
Even if tourism revenues increase as expected, costs such as labor, food and fuel are also increasing.
“Businesses large and small across Canada are really feeling this drop in profitability. »
