Skift Take

Things change fast in a pandemic. Canada ranked first in tight Covid restrictions, then it trailed the U.S. in vaccinations. Now it's playing catch up, while asking Canadians to help by spending the bulk of their vacation savings at home this summer, and not next door. Will they listen?

A year after the pandemic shut down global travel, Canada’s borders remain restricted to the world, and closed to the U.S. by land. At the start of 2021, America’s northern neighbor further implemented draconian entry requirements for citizens and visitors in an attempt to curb the entry of Covid variants.

Further stunting recovery is Canada’s recent vaccine distribution lag. While fellow G7 nations are advancing on that front, notably the United States — its primary tourism competitor —only three out of 100 Canadians had received one dose as of two weeks ago, compared to approximately 14 in the U.S. and 21 in the UK. The delay has even prompted political rivals to lash out at Prime Minister Justin Trudeau.

Trudeau has indicated vaccinations would reach all Canadians by September 2021, but shared days ago that distribution is moving faster, with at least one million Pfizer vaccine doses per week from March 22 to May 10.

“We’re now seeing supply coming in on a much accelerated basis,” said Marsha Walden, CEO of Destination Canada. “Obviously the American rollout plan, it’s very aggressive; that changes the perceptions perhaps of Americans about Canada, but it’s not just the rate of vaccination rolling, it’s also the rate of uptake. And we know Canadians are very willing to have vaccines.”

Still the initial vaccine misstep and any additional lag are likely to delay Canada’s tourism sector recovery, which is now largely focused on the domestic market for 2021. Prior to Covid, Canada welcomed 21.1 million visitors and contributed $105 Billion to the economy.

The major challenge ahead? Curbing Canadians’ large appetite for international travel once borders reopen. According to Destination Canada’s newly released report detailing Covid’s harsh impact on tourism a year into the pandemic, 80 percent of Canadians plan to travel as soon as restrictions loosen. Based in 2019 data, approximately $28 billion a year leaves the country for international leisure travel alone, most of it to the U.S.

That’s why Destination Canada is hopeful that this year, it can convince locals to shift two thirds of their international spend towards domestic travel. “Nineteen billion of that would go a long way to helping our industry limp along through this summer,” Walden said.

Canada tourism’s recovery to 2019 levels is projected for 2025. If Canadians heed the backyard tourism call, recovery could come an entire year sooner.

Tourism is the “Heartbeat of Canada”

Early on in the pandemic, Canada announced it was investing $21.8 million (C$30 million) in its provinces and territories to help them promote backyard travel while the country’s borders remained shut. It was a novel approach for the country. Occupancy picked up locally, but revenue per available room (RevPar) dropped significantly as hotels focused on filling their rooms.

As the domestic tourism push continues, Destination Canada has strategies in place to help Canadians become aware of the big role they can play in their country’s economic recovery.

“Right now we’re just talking about tourism as the heartbeat of Canada,” Walden said. “One in 10 jobs in our country are tourism related, and so when Canadians walk down their main street and see restaurants at half-opened operations, and hotels closed and festivals not happening, you know, that really affects our quality of life and we want our population to really understand that tourism is the heartbeat of Canada and makes our quality of life so rich.”

Destination Canada’s phased domestic tourism marketing plan includes running a series of special offers this year, starting in the summer, “to give Canadians a chance to explore like they’ve never had a chance to do before because there will be an enriched value proposition for them,” Walden said, while noting she was not able to share further details at this time.

But it’s also about raising awareness on the power of local versus international spend. The 2021 Tourism Recovery Plan from the Tourism Industry Association of Canada, for instance, reveals that 78 percent of tourism spending in Canada is from Canadians, but international visitors spent an average of $1,047 per trip compared to about $244 per trip from domestic visitors.

Redirecting that foreign spend power towards domestic and getting locals to grasp the importance, will be critical this year, particularly as 99 percent of businesses in Canada’s tourism sector consist of small and medium enterprises.

Covid Vaccines Key to Tourism Recovery

A new survey from The Points Guy reveals that, out of 2,400 surveyed U.S. adults in March 2021, up to 64 percent indicated they are eager to travel this year, while a staggering 76 percent said they were likely to travel to a destination or with a travel provider requiring proof of Covid vaccination. Of those, another 49 percent are “more likely” to do so.

Moreover, the American Society of Travel Advisors’ most recent consumer survey results revealed that 44 percent of Americans are getting vaccinated just so they can be free to travel.

This means U.S. travelers are likely to either choose their own backyard or escape to other shorter-haul international beach and nature destinations rather than up north as they might have in the past — at least, not until Canada reopens.

The repercussions of Canada’s vaccine delay coupled with its extended border closure are far-reaching. Cities are the most impacted, particularly in Ontario and Quebec provinces, but the Canadian border closure has also hit hard across the pond in neighboring U.S. towns.

Disparate Impact on Indigenous Tourism and Immigrant Workforce

Before Covid hit, according to the Indigenous Tourism Association of Canada (ITAC), the Indigenous tourism industry was outpacing the growth of Canada tourism as a whole. With many new Indigenous businesses not yet showing a profit, however, they’ve been left out of the small business loan relief programs.

Accounting for at least 1,700 businesses, over 36,000 employees and contributing more than $1.6 billion annually to Canada’s gross domestic product, Indigenous tourism is one of the largest economic drivers for Indigenous communities. Without financial assistance and without international travelers, up to 66 percent of businesses may fall off the tourism scene. But the Indigenous Tourism Association of Canada is hopeful that summer will see some form of visitation once vaccinations reach the communities.

“Through the study conducted by Insignia Marketing Research done in the summer of 2020, we know that demand among local travelers has grown for Indigenous tourism experiences,” said Keith Henry, CEO of Indigenous Tourism Association of Canada. “We will be launching an inspiring marketing campaign this spring to get Canadians dreaming about, and perhaps more importantly booking, the authentic and dynamic Indigenous experiences that are available from coast to coast.”

Henry said that ITAC was also advocating for federal Covid-relief funding for its members in the form of grants, so that Indigenous tourism businesses can rehire staff and make necessary renovations to be Covid-compliant.

Covid impact data also shows deepening inequality because of Covid’s disparate impact on women, who make up the majority of the travel services workforce, as well as on immigrants, who make up 26 percent of tourism employees, higher than the national 23.8 percent.

For now, based on the current 2021 outlook, Destination Canada is forecasting that tourism overall will increase 28 percent relative to 2020 or 35 percent below 2019 levels, while domestic tourism demand will reach $64.5 billion, which is 30.7 percent higher than 2020, yet 21.3 percent less than 2019 levels.

Beth Potter, the CEO of Tourism Industry Association of Canada, feels hopeful that the accelerated vaccine distributions will happen sooner than later. “Even today, the Prime Minister was talking about everybody being vaccinated by June and if that’s the case, we would like to start planning to open the borders this summer.


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Tags: coronavirus recovery, Destination Canada

Photo credit: Canada's initial vaccine distribution delay and any potential future lags could further slow tourism's recovery. Matteo Colombo / Getty Images

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