The fallout of the ongoing global pandemic has meant that many sectors and industries have suffered huge drops in revenue, as people have largely stayed indoors, whether by choice or by force, to keep themselves as safe as possible. Tourism has been one of the worst-hit sectors in this regard, as the number of travellers has gone down drastically. Canada is no different, where the sector is facing a very bad situation and will need government help to be able to survive till next year.
All of the country’s tourism industry groups have warned that they will face bankruptcy and job losses on an unprecedented scale if government assistance is not provided soon enough. Tourism partners and associations have seen their revenues fall by 61% to 100% because of the various restrictions that have been put in place, while hotels have also seen a drop of 70-90% in their earnings. Destination Canada, which is the department responsible for promotion Canadian tourism, moved $30 million from its international marketing budget in July towards encouraging domestic vacations over the next 18 months, with advertising and social media campaigns targeted towards Canadians themselves, asking them to travel within the country as much as possible. With the various border restrictions in place, not to mention physical distancing rules, this was one of the only ways in which the Canadian tourism department could have redirected their efforts to try and bring about a spark for the industry again.
A wage subsidy program is in place for companies to be able to pay their workers, but the heads of the various tourism and hotel organizations have made it clear that this scheme will need to be extended till next spring or summer, which is when they anticipate that they will begin making revenue again. They have also asked for direct financial aid to be provided immediately, not in the form of loans but as grants, to allow them to meet costs and survive for the time being. Even the most famous and popular tourist destinations in Canada have been suffering. The province of Niagara, which has the iconic Niagara Falls, has seen its unemployment rate shoot up to over 12%, with just under 15,000 people still employed in the hospitality and food services industries in the state as of July. This is 10,000 fewer than a year ago, albeit there is some encouragement in the fact that it is an increase of 1,700 over the previous month. Nevertheless, hotels and casinos remain closed in the province, with premier Doug Ford having only recently allowed casinos to reopen after the province moved into Stage 3 of its economic recovery plan. Despite this, the two biggest casinos – Niagara Fallsview Casino Resort and Casino Niagara, remain closed due to the lack of customers, and so the picture is bleak for new live casinos in Canada elsewhere as well.
Hotel occupancy rates in the province averaged 23% in the five months from January to May this year – they were at 53% for the same period last year, showing just how badly hit the hotel industry has been by the pandemic. Revenue per room has fallen to $25.30 from $70.79 in 2019, and the average nightly rate has been $99, a fall of over $30 from previous years. All of these figures show that the hospitality industry is reeling at the moment, and things are not likely to get better anytime soon. In such a scenario, it seems as though government assistance is the only way possible for these industries to survive this year, till they get to a point where travelling is safe again and they can then start earning revenue again.