Tourism plays a significant role in the health of the retail industry in Canada.
But with the pandemic the last few years, tourism has suffered and with that the retail industry, particularly in towns that rely on tourists, has felt the pain.
However, there is light at the end of the tunnel.
According to the recent Destination Canada report, Tourism Outlook: Unlocking Opportunities for the Sector, total tourism revenue was set to exceed 2019 levels, generating $109.5 billion by the end of 2023.
“This represents the recovery of the tourism sector from the COVID-19 pandemic, one year earlier than projected. Despite tourism coming to a standstill in 2020, the industry, post recovery, is expected to grow faster than the general economy at 5.8 per cent, reflecting its resilience and importance to the economic vitality of the country,” said Destination Canada.
“While this is positive news, it is important to recognize that recovery both geographically and across sub sectors has been uneven. The challenge ahead is creating profitable growth for tourism businesses given their current debt loads and inflationary pressures.”
Tyler Riopel, Director of Destination Development with Tourism Jasper, said that in 2023 Jasper welcomed around 2.4 million visitors, which is on par with 2019 (pre-COVID) levels.
“Domestic travel is extremely important for the visitor economy in Jasper as it accounts for close to 40 per cent of our annual visitation. These visitors are even more important in the winter months and is estimated to account for somewhere between 80-90 per cent of our visitors,” he said.
“Of our total visitation, 55 per cent are international travelers and we consider them to play a significant role in Jasper’s visitor economy as they are more likely to have extended stays, visit mid-week and spend more in destination. In 2023, international visits from the US were nearly equal to the number of travelers we saw from Ontario last year at close to 115,000.”
While visitor numbers from international markets indicate lower volumes, average spend per person is higher than pre-pandemic levels, explained Riopel, adding that 2023 revenues exceeded the 2019 level which is great news for the tourism industry as a whole.
“In Jasper we expect to see our winter season to be somewhat flat linked to a slow start to the winter season with lower than normal snowfall levels and an increase in domestic travel to sun destinations. As winter conditions improve we anticipate visitation levels to increase through the end of Q1. International travel will likely continue to recover as people get more comfortable traveling, so we are confident that summer demand will remain high,” he said.
The Destination Canada report outlines that there is an opportunity for the tourism sector’s growth trajectory to reach $160 billion in revenue by 2030, but capacity constraints are limiting the sector from achieving its full potential.
It said a transformational path must be embraced. Without change, tourism will move forward along its long-term trajectory where constraints will limit its potential to $140 billion, which when adjusted for inflation, shows no real growth.
“At this critical juncture, we face a clear choice,” said Meaghan Ferrigno, Destination Canada’s Chief Data and Analytics Officer. “The difference between $160 and $140 billion is about more than revenue. It’s about unleashing capacity when and where we have it, it’s about creating stable employment and enhancing societal wellbeing. And importantly, it’s about smart growth that drives real prosperity for tourism businesses across every corner of this country.”
Key report highlights include:
- Tourism revenue will exceed pre-pandemic levels in 2023: Amid inflationary headwinds, tourism spending will exceed pre-COVID-19 levels in 2023, reaching $109.5 billion. Domestic activity has led revenue recovery and is on track to reach 104 per cent of 2019 levels by the end of 2023.
- Opportunities constrained by capacity: As we look to 2024 and beyond, opportunities for growth prevail but challenges persist as we enter a fiercely competitive global marketplace where we are all vying to attract travelers. Demand for travel is projected to grow by 30 per cent by 2030 and will outpace our capacity to host in peak seasons, limiting Canada’s growth potential.
- $160 billion Potential: The report identifies a $160 billion revenue potential for the tourism industry by 2030, but only if a transformational path is taken that addresses constraints and shifts demand to change how growth occurs.
- Closing the $20 billion opportunity gap: Destination Canada proposes a transformative path to secure an additional $20 billion in annual revenue by 2030, driving real prosperity for tourism businesses across the country and contributing a 14 per cent increase in GDP generated by tourism, 84,000 more jobs and $5.3 billion more in tax revenue for all levels of Government.
- Transformational path: Industry transformation will close the $20 billion opportunity gap but it will require sector-wide collaboration on seven key levers: revenue and yield growth, brand leadership, investment, access, workforce and digital readiness, environmental sustainability and support from Canadians.
According to Statistics Canada, tourism spending in Canada grew 0.5 per cent in the third quarter, following a 1.1 per cent increase in the second quarter. Growth in the third quarter was driven by a 2.3 per cent increase in foreign tourism demand, while domestic tourism demand declined 0.2 per cent.
