By Amy Bostock
The Participants
- Royce Chwin president & CEO, Destination Vancouver
- Darlene Grant Fiander president, Nova Scotia Tourism
- Andrew Siegwart president & CEO The Tourism Industry Association of Ontario
- Marsha Walden president and CEO, Destination Canada
- Andrew Weir executive vice-president, Destination Toronto
Amy Bostock: Has tourism recovered in Canada?
Marsha Walden: Our latest Tourism Outlook report shows total tourism revenue is set to exceed 2019 levels, generating a projected $109.5 billion by the end of 2023. This represents the recovery of the tourism sector from the pandemic, one year earlier than forecast.
Leisure travel has been leading the recovery of the tourism sector, especially domestic travel, and we can see people have re-affirmed the importance of travel. Even in today’s economic climate, consumers globally are allocating a larger share of wallet to experiences over goods, including 48 per cent of Canadians who are prioritizing travel at the expense of other spending.
While business events are slower to recover, we know that people and businesses are looking for [an] in-person connection. We’re seeing the leads pipeline improving but actual bookings won’t recover until 2028. This slow return is a trend that’s impacting global business events and isn’t just unique
to Canada.
Andrew Siegwart: The tourism industry across Canada has benefited from its culture of determination, collaboration, and innovation to mount a promising recovery; however, its progress has been uneven within the many regions and sectors of tourism across the country. This is ultimately a challenge for Canada’s visitor economy because we need all sectors of tourism to be healthy to compete internationally: accommodations, food and beverage, attractions, transportation, conventions and events, agri-tourism, et cetera. Further, broader economic and infrastructural gaps are strong forces that are still causing a drag on the rate of recovery for all sectors of Canada’s economy.
Andrew Weir: Toronto’s visitor economy is certainly on an upward trajectory but hasn’t yet returned to full power. In 2023, the city welcomed nearly nine million visitors, which is 93 per cent of 2019 levels. However, a closer look at the data reveals that domestic visitors make up a larger share as international visitors remain 25 per cent behind pre-pandemic levels. And while visitors last year spent a record $7 billion in Toronto, that growth is partly attributable to inflation. Sustained recovery and growth depend on the return of all markets and segments, including international travellers and also business travel, both of which are core to our visitor economy.
Royce Chwin: The visitor economy has re-built in Vancouver. We’re at, or close to, 2019 levels in all of the key indicators. We had a record 11-million overnight visitors in 2019 and final numbers aren’t in yet, but we’ll likely end 2023 with around 10.8-million overnight visitors.
Cruise continued to set records with 332 sailings this season, making this the second consecutive year of record ship arrivals with more than 1.25 million passengers estimated through the Port of Vancouver — a 54-per-cent increase over last year. Occupancy rates have returned to pre-pandemic levels with ships largely at 95 per cent occupancy.
Meeting and convention business continues to be strong for Vancouver and the city remains largely unaffected by the challenges other peer cities have had in re-building this segment of their market. The number of citywide conferences held here in 2023 were the second most on record and 2024 is on course for a potentially record-breaking year with 27 citywide events that we’ve helped to bring into the destination already confirmed and more are currently in discussion.
AB: What were the top challenges your association members faced in 2023?
Darlene Grant Fiander: As the re-building from COVID continues, the top challenges for Nova Scotia businesses have been ongoing recovery, debt management, access to capital, attraction and retention of labour especially senior level, and accessing affordable insurance.
AS: Our members, much like our counterparts’ members across the country, have been navigating the tight labour market, adjusting to the impacts of inflation on business costs and consumers, and coping with unprecedented debt levels. In addition, we’ve been working hard to re-build international visits as well as the critical conventions and events sector. On a more personal level, the industry’s leaders and teams were also navigating new realities of business operations after a period of intense volatility. The impacts of this dynamic on people, work-life balance, mental health, and more were still very much top-of-mind.
MW: The labour shortage is acute. By way of example, we know that a very high number of hotels aren’t able to fully re-open all of their rooms due to a reduced workforce. Over the course of the pandemic, debt levels rose dramatically, and operators are struggling to invest and re-invest in tourism assets.
RC: Our members faced many of the same challenges that most businesses are facing: higher operational costs, higher interest rates and difficulty in hiring and retaining workers. Vancouver can be especially tricky in that last regard because finding affordable long-term housing can be challenging. Like most major urban centres in North America, there has been an uptick in crime and vandalism that have added further financial burdens on businesses, and a rise in street homelessness and safety concerns is becoming more of a reputational issue.
The U.S. remains one of our strongest-performing markets, although not quite back to pre-pandemic performance. However, international travel has remained below the rate seen prior to the pandemic with little sign of that trend changing markedly in the short term. And we know that international travellers spend the most money while they’re here, which obviously has an impact on our members.
AB: What are the biggest challenges your membership will face in 2024?
AS: I see three main challenges, which I prefer to frame as opportunities: it’s time to build a strategy focused on growth and management; the industry, and it’s supporting organizations, need to prioritize demand-driving and tourism-management initiatives; and we need to see action on key infrastructure gaps.
RC: As a destination,
we continue to draw attention to the lack of
new hotel rooms in Vancouver, and across all of Metro Vancouver, and point out that the increasing demand will continue to aggravate that gap in capacity. Lack of capacity and high demand inevitably leads to higher rates — and we’re mindful that these rates may have a significant impact on Vancouver’s competitiveness as a destination. Becoming a boutique destination for the wealthy doesn’t align to one of Vancouver’s values: inclusiveness.
MW:Attracting investment to build new hotels is critical, but new buildings will take time to come online — often five or more years. We must become more creative in how we develop tourism assets with mixed use so that also serve the needs of the communities in which we operate. In the meantime, we must make the best use of the available rooms we have today by driving demand when and where we have capacity to host. For most places, that means a much greater emphasis on attracting visitors in fall and winter and ensuring that our visitors go beyond the core tourism destinations to explore more of Canada.
AW: The biggest challenge in 2024 is undoubtedly the debt challenges that many businesses are facing. The deadline to pay CEBA and RRRF loans was this January, and businesses that were unable to re-pay their loans in full are now incurring interest. Ottawa recently estimated that more than a quarter of businesses in Canada missed the deadline to repay.
Ab: What are the top barriers to a rebound in Canadian tourism and
what’s your strategy to address them?
RC: Cost-of-living concerns continue to bite into many people’s discretionary income and their travel plans are certainly being impacted by that. But we need to focus on the part of ecosystem where we can influence demand versus putting effort toward an economic condition such as inflation, that we can’t control. International travel hasn’t been re-building at quite the pace we had hoped and that’ll continue to constrain a full rebound.
Continued, sustained and patient investment in key markets should pay off in the long run. And there are opportunities to build new business from markets that Vancouver hasn’t traditionally focused on, that have direct or very good air connectivity. For example, Air Canada has started a direct service three times a week from Vancouver to Dubai — the only direct route in Western Canada.
DF:The biggest challenge is access — the return of airlines servicing all parts of Canada, in particular, regional routes. We’re back to about 80 per cent of 2019 levels. While there has been steady recovery in both domestic and international flight seat capacities, both are still below pre-pandemic levels and a number for regional routes have yet to be restored. Ease of air access is fundamental to being an attractive destination.
AS: We need to create inclusive and aligned strategies for the future that include all sectors of the tourism industry, and governments at all levels. I see an opportunity to carve out more time and space to diversify and grow visitor markets, with a focus on international visits. This will help us to innovate and compete and will also drive important discussions about capacity management and investment. Finally, we need to co-create solutions to structural problems with government so that we can see action on challenges that are holding us back: better workforce data and labour market planning; workable polices to address immigration barriers; innovative frameworks to engage industry in developing attainable and workforce housing; transportation infrastructure to stabilize deteriorating community connections; climate and energy transition work — just to name a few. The reality is that our industry is bringing its own solutions to these challenges in communities across Ontario because we need to solve them. Celebrating and amplifying these efforts will be a big part of TIAO’s strategy.
MW: Let’s remember that Canada’s overall revenue in 2023 will finally cross the previous high-water mark of 2019, though that’s in nominal, not real dollar terms. So, now we can begin to look forward. We’re at a truly pivotal moment for our industry, we can embark on a new transformational growth path, addressing constraints and shifting demand to change how growth occurs. These changes include attracting guests outside the summer months when capacity constraints are greatest, investing in employees and technology to increase productivity, more strategically developing destinations to attract guests to regions with lower occupancy rates and attracting higher-value guests — all of which can increase yield, while reducing the need for workers and accommodation.
Our 2030 strategy, which will be released this year, aims to address the key constraints while delivering smart growth, greater prosperity and more resilience in the tourism sector and enhancing the wealth and wellbeing of locals.
AW: Re-building the pipeline for business events has been a top priority. While that pipeline is once again robust as a result of those focused efforts, the realities of booking cycles mean that the near term of 2024 through 2026 will be softer in large-scale meetings. Sales efforts continue to follow the dual tracks of securing long-term citywide business while also identifying opportunities
for near-term conversion to fill the gaps over the next
three years.
Another challenge are the geopolitical factors that suppress visitation to Canada from several key markets. Canada is clearly at a disadvantage in the China market relative to the U.S., Australia and other countries that all have Approved Destination Status and have seen their direct service return. Similarly, Mexico has shown tremendous momentum in recovery but that momentum is threatened as Canada contemplates greater restrictions on entry from Mexico. The pressures in both markets are unrelated to tourism but the impact will be felt profoundly throughout the visitor economy.
AB: What is the role of government in helping Canada grow tourism revenue?
DF: Policy development that encourages innovation and removes barriers for growth and environmental policy that protects Canada’s natural assets as they are a competitive advantage.
AS:Governments play a significant role in partnering with all industries to sustain economic and social growth across the country. Industries, in turn, contribute to the needs and priorities of government through employment opportunities, tax revenues, home-grown innovation and services, and more. Tourism and governments are increasingly coming together to co-create solutions to issues with all levels of government, for example, attainable housing, transportation, environment, social wellbeing, community safety, equity and inclusivity, and more. These collaborations aren’t just about funding, they’re about working together to make a greater impact.
Collaborations between governments and industry are key to creating the right conditions for businesses to grow and thus to increase revenue for the workforce, industry and governments. It’s a formula applied across most sectors for good reason, it delivers results and prosperity. I would also add that in an increasingly polarized global community, Canada’s diplomacy and the global nature of our visitor economy will require deep collaboration.
MW:Having policy support from governments is critical to the future success and competitiveness of Canda’s tourism sector. And we know that 82 per cent of Canadians believe that tourism positively impacts communities all across Canada. Policy-makers should feel motivated to support and grow the sector, which disproportionately contributes to our GDP, tax base, and quality of life versus other sectors. And, importantly, tourism is an important onramp to the economy for many people — especially youth, newcomers, women and people seeking flexible working hours such as retirees and parents.
RC: Tourism isn’t an end in itself, it’s a pipeline to economic and social well-being and government should recognize this through effective policies, designed not only to encourage growth but ensure existing businesses are more resilient. The federal government must fully implement their tourism growth strategy ‘Canada 365’. And we’d certainly like to see the government advocating for China to put Canada back on the list of countries with Approved Destination Status.
AB: How critical is the airline industry to tourism recovery in Canada?
RC:Foundational to building a resilient and responsibly built visitor economy is air service and thus the airlines themselves. Short-, mid- or long-haul routes, given our vast geography, is critical to our destination competitiveness and we’d like to see our provincial government come to the table with funding to bring new routes into YVR.
AS:It’s fundamental to re-building international visitation, conventions, and conferences as well as domestic travel. In a real-time example, we’ve recently seen the significant reduction of the Ontario Winter Games event to be hosted in Thunder Bay, Ont. in February due to reduced air capacity and costs. It raises concern about the ability to grow inbound visitation when we cannot effectively service domestic markets.
MW:Air connectivity is fundamental to tourism’s health — a keystone species as we like to call it. As a result of COVID, Canada lost 90 per cent of air passenger capacity into Canada, or 27 million inbound seats from our key target markets. Air access is critical for tourism and the re-establishment of air routes was a key part of our recovery strategy. As of November 2023, our key target markets are 94 per cent recovered to 2019 level in terms of seat capacity, 98 per cent if we exclude China.
But if we look further ahead, we know we need to broaden access to and within Canada — increase the number of seats, frequency, and very critically, the seasonality of air service. Initially, we believe this will be built by strengthening our current routes year-round, then extending our reach to new routes. Of course, we’ll be working closely with our airline and airport partners on this ― both here in Canada and around the world. And, we’ll work within the federal government to provide advice on Canada’s air bilaterals as well as our borders visa programs, and multi-modal connectivity — to welcome the world to Canada.
AW: Access is critical to a destination’s success, particularly for a globally connected destination such as Toronto. We’ve long viewed Toronto’s global access as a competitive advantage — the most flights to and from the U.S. of any city in the world, and a network of destinations served by our two airports that can match any city. After the pandemic interruption, it took time and significant effort by airline and airport partners for many of those routes to resume and by now most have, and even some new ones have been initiated.
AB: How can niche markets help attract new visitors?
AW:Toronto’s culinary scene is core to our content strategy. With more than half of Torontonians born outside of Canada, there’s a diversity of thought and creativity that’s often best expressed through the city’s exceptional food experiences. That was at the foundation of raising Toronto’s international culinary profile by launching Canada’s first MICHELIN Guide. The guide reaches food-inspired travellers and elevates Canada’s culinary story as a whole. That profile, combined with our deep culinary content that’s co-created with chefs, restaurateurs and knowledgeable ambassadors brings Toronto’s diverse and high-quality culinary story to a global audience of food-lovers and travellers.
DF:People are seeking out authentic experiences that evoke emotions. Culinary tourism, cultural tourism and sport tourism are all ways we can create best-in-class experiences to attract visitors and build repeat business.
RC: Culinary tourism is a good example because it’s something we’ve invested in heavily – we know the market is there and we understand the strength of Vancouver’s incredible culinary scene. And we knew it would take more than an innovative marketing campaign. It meant influencing the direction of the sector itself and being prepared to commit to some seriously significant initiatives.
We created the Dine Out Vancouver Festival, more than 20 years ago, to get locals out and into restaurants during a normally slow time in January and February. What started out with 57 restaurants has expanded to close to 400 restaurants, added special events, hotel and airline offers, and an amazing series called the World Chef Exchange in which we bring chefs from the global culinary community to collaborate with our local top talent. The collaborations this year featured all MICHELIN Guide-recognized teams.
When Michelin approached us several years ago to bring the MICHELIN Guide to Vancouver, we knew we were being presented with another opportunity for a massive home run. The Guide was introduced in 2022 and it has been an absolute gamechanger for the industry. One of our goals was to keep emerging local culinary here and also attract new young chefs to come here knowing there would now be opportunities to work with MICHELIN-recognized teams. Every restaurant I’ve spoken to that has been recognized by Michelin has seen a positive impact through increased
sales and staff recruitment
and retention.
AS: Most specialty markets are supported by exceptional legacy and/or emerging associations that bring deep and specialized expertise to attract new visitors. I’d love to see these innovative sector leaders receive more financial support from their provincial and federal counterparts and receive more active participation from tourism industry players and businesses. TIAO works closely with leading specialized association networks in Ontario, and we ensure that we work as a team when speaking with government, developing policy recommendations, and creating thought leadership and learning experiences.
Beyond attracting new visitors, these networks bring unique perspectives to solving community challenges. For example, the culinary-tourism sector helps to increase awareness of agricultural sector challenges and opportunities, which can benefit both food security and tourism growth. Indigenous tourism organizations and communities hold generations of land stewardship expertise that we should be celebrating and working with more to improve the effectiveness of community sustainability planning.
MW: Our provincial, territorial and Destination-Marketing partners have a strong and passionate presence in important segments, such as culinary tourism. Tourism businesses in these sub-sectors should stay connected with their local tourism organization to ensure they’re aligning on strategy and can take advantage of marketing support and programs on offer.
AB: What do the next few years look like for Canadian tourism?
DF: I feel there will be tremendous growth in cultural tourism and environmental stewardship will become more attached to a brand for tourism. Domestic growth (which started with COVID) creates a tremendous opportunity to build national pride and reduced travel deficit. At a business level, more personalized experiences, re-classification of work in the sector — rationalization of businesses will continue.
AS: I believe our industry will be focused on balancing two critical needs: mapping-out and deploying strategies for innovation and growth, and contributing more to structural gaps within labour markets, key policies, and foundational infrastructure.
The reality is that we cannot expect governments alone to take the lead on either of these spheres going forward. Tourism is in virtually every community across Canada, our track record and creative work to solve community challenges such as safety, attainable housing, transportation networks, and sustainability, is strong. We need to leverage this strength, in partnership with governments, to get past our current economic inertia. This is where organizations such as TIAO and our counterparts across the country can lean-in, demonstrate leadership, and add more value; it’s precisely where we’ll be focused in the years ahead.
MW: We’re incredibly optimistic about the future of Canada’s tourism industry. Our latest projections show a potential to hit $160 billion in revenue by 2030. Global experts say our sector will grow faster than the general economy at roughly six per cent per year from 2024 to 2030 but onlyif we have capacity to meet that demand.
But to truly harness this potential, we need to work together. This isn’t a challenge any single organization or entity can tackle alone. By working together collectively, we can drive transformative growth, not just in terms of revenue, but in creating sustainable, meaningful experiences for tourists and tangible economic, socio-cultural and environmental benefits for our communities.
The future looks bright, but it’s a future we need to build together. That’s the real message here – collective action is the key to unlocking the full potential of Canadian tourism.
AW: I’m bullish on tourism and optimistic about Toronto’s future. The factors that made Toronto and Canada compelling destinations five years ago are just as true today and next year. What really excites me is the growing appreciation beyond tourism stakeholders of how vital our visitor economy is. More and more leaders in the business community, academia and community leadership are actively engaged in attracting new events and are seeking ways to connect their business to our business. Some challenges persist, no doubt. But we’re better positioned to address them today than ever, and poised for sustained and meaningful momentum in our visitor economy.
RC: Relentless. But in the best possible way.
