It’s no secret how challenging the last 19 months have been for the global travel industry, and so Canadian tourism companies are not alone in feeling the pain. But they are still in the midst of an on-going crisis as Beth Potter, President and CEO of the Tourism Industry Association of Canada (TIAC) explained this morning. The industry is only beginning to emerge from the carnage.
Potter gave her remarks from Banff, Alberta during the first in-person Board meeting held by the association since the beginning of the pandemic.
Potter outlined that the tourism industry was the first hit, hardest hit, and will be the last to recover from the pandemic crisis. The impact on the visitor economy has been greater than SARS, the 2008 economic crisis and 9/11combined.
In a report prepared by TIAC researchers, Potter made clear that “Prior to COVID-19, tourism was Canada’s fifth largest sector sustaining more than 1.8 million jobs. But since the pandemic, the industry has lost two summer seasons, drained financial reserves, taken on massive debt and now has difficulty attracting enough employees as it strives to relaunch.”Potter then added, “without the economic jargon, tourism is on the brink of disaster without continued federal support.”
The data makes clear that tourism businesses have faced devastating revenue losses due to COVID-19, and TIAC made public the following key points from an industry-wide survey of tourism businesses in every province andterritory:
- Almost 40% of respondents say they would have to shut down their businesses today if they no longer received support from government programs.
- One third of respondents expect more than a 50% decline in revenue in 2021 compared to 2020.
- One third of respondents lost between 75% and 100% of revenue compared to the same time in 2019.
- 64% of respondents indicated low cash flow as a challenge facing their business, with a majority citing financial shortfall and burden as the biggest risk currently impacting them.
- Almost half of respondents have taken on over $50,000 in debt to keep their business afloat.
- Majority of respondents predict it will take between 1 to 3 years for sufficient tourism demand to return to thepre-pandemic level of profitability.
- 65% of respondents accessed the Canada Emergency Wage Subsidy (CEWS), and 35% accessed the Canada Emergency Rent Subsidy (CERS).
Potter highlighted the report’s conclusions that “even with extensive vaccinations and the gradual lifting of restrictions, a bleak fall and winter is certain. There will be no conventions, limited business and government travel, and the wind down of support programs (CEWS & CERS) could not come at a worse time.”
On the eve of the federal leaders’ debate, Potter urged “all parties to support a qualified and limited financial support program from September 2021 to May 2022 to the hardest hit businesses.”