Maureen Gordon has a history of weathering storms. In the aftermath of the 9/11 terrorist attacks, she and her husband launched their ecotourism venture, Maple Leaf Adventures, just as international travel plummeted. Yet, they rebounded swiftly. However, the fallout from COVID-19 has proven to be a prolonged ordeal.
The pandemic, of course, was incredibly tumultuous and scary," Gordon recounted. Operating week-long excursions along the Pacific coast on a variety of vessels, including a schooner, converted tug boat, and catamaran, the Gordons found themselves at the mercy of government shutdowns. "We were scared, our bank was scared," she admitted.
While 2022 witnessed a remarkable resurgence as Canadians sought to unleash pent-up wanderlust, 2023 presented a setback. Rising interest rates tempered travelers' enthusiasm, creating what Gordon describes as a "hiccup." Despite the renewed interest in travel, tourism businesses are grappling with unprecedented debt burdens.
We crossed the ocean out of our wrecked boat, and now... we're all just trying not to die on the beach," Gordon metaphorically expressed the industry's struggle.
Although tourism has staged a remarkable comeback from the lows of the pandemic, operators insist that the sector has yet to regain its pre-COVID vibrancy. Debt continues to weigh heavily on thousands of small businesses nationwide. While revenue surged to over $109 billion last year, a four percent increase from 2019, inflation-adjusted figures reveal a less rosy picture.
Beth Potter, leading the Tourism Industry Association of Canada, advocates for governmental support, including a new low-interest loan program and a temporary foreign worker stream tailored to the tourism sector. However, the government's focus on reducing the share of temporary residents in the population may hinder these efforts.
The ramifications of this policy shift will be felt across various sectors, particularly in tourism-dependent regions like Northern Canada and Niagara Falls. Ski resorts and agricultural areas will also bear the brunt, highlighting the urgent need for targeted support to sustain the industry's recovery.
In the realm of travel, hospitality, and recreation, time is a merciless adversary. Every unsold hotel room, every unbooked tour slot represents an irretrievable loss. "If you don't book the hotel room tonight, you can't book that hotel room two times tomorrow night," lamented Potter, highlighting the perishable nature of offerings in this industry.
Despite signs of economic recovery elsewhere, the tourism sector continues to lag behind. While overall business numbers surpassed pre-pandemic levels by December, tourism-linked enterprises remained slightly below par, according to Destination Canada data. A Canadian Federation of Independent Business survey underscored the persistent burden of pandemic debt on small- and medium-sized enterprises, with an average debt of $107,700 per business.
Among various sectors surveyed, hospitality and transportation operators expressed the bleakest outlook for the coming year, rivaling only retail in pessimism. Ski operations and tourist destinations like the Okanagan Valley faced formidable challenges, exacerbated by climate-related disasters such as fires, droughts, and floods.
Tourism Minister Soraya Martinez Ferrada recounted the struggles faced by regions beyond major urban centers, where recovery has been slower. Despite positive trends in Canada's largest cities, business travel and conventions remain sluggish, compounding the woes of regional transport, which has yet to rebound fully.
Domestic seat capacity, a crucial metric for gauging travel activity, languished at 84 percent of 2019 levels by the fourth quarter of 2023, signaling ongoing challenges for leisure markets. Potter highlighted the inconvenience caused by diminished regional transport, citing the need to fly from Prince Edward Island to Newfoundland in the absence of ferry services—a deterrent to travel between these destinations.
As the industry grapples with persistent hurdles, it remains clear that concerted efforts are needed to support the recovery of tourism and related sectors across the country.
The minister emphasized the commitments outlined in the federal budget to bolster the tourism sector. Among these pledges is the promise of new funding to replace Via Rail's aging fleet on routes outside the Quebec City-Windsor corridor, although the exact amount remains unspecified pending a procurement process. Additionally, Martinez Ferrada pointed to $124 million allocated for Atlantic ferry operations, alongside investments in Northern development opportunities and Indigenous tourism operations announced in the previous year.
While no imminent plans for sector-specific loans are in sight, the minister framed the forthcoming $2.5 billion in carbon rebates destined for small- and medium-sized businesses as a crucial financial lifeline.
Meanwhile, in Vancouver, Gordon expressed cautious optimism about the year ahead, tempered by uncertainty. "Most people aren't 100 percent confident in their projections," she acknowledged. "It's not a straightforward path to recovery... The market feels incredibly unpredictable right now.
Despite the challenges, Gordon emphasized the resilience and determination of those in the industry. "It's not a tale of doom and gloom," she remarked. "But it does highlight the significant struggles — some of which may be avoidable — and the burden placed on a vital industry that contributes immensely to Canada's prosperity and global reputation.
Published by The Canadian Press on April 23, 2024, this report sheds light on the ongoing dynamics within the Canadian tourism landscape.
In conclusion, while the Canadian tourism industry grapples with ongoing challenges, there are glimmers of hope on the horizon. The commitments outlined in the federal budget offer a lifeline to struggling businesses, with promises of funding for infrastructure upgrades and carbon rebates injecting much-needed support. Despite the uncertainties ahead, stakeholders remain resilient and committed to navigating the unpredictable market landscape. As the industry continues to evolve and adapt, it's imperative for policymakers and stakeholders to collaborate effectively to ensure a sustainable and vibrant future for tourism in Canada.
