2019 was a record year for Canada's tourism economy. On the one hand, there was the highest number of welcomed tourists, on the other, Canadians' propensity for international travel has grown, with Italy among the favorite destinations in the world. Using the main economic indicators, we reconstruct what happened to the Canadian tourism economy before and after the pandemic shock, and how Canada is reacting to the impacts of COVID-19.

 

Andrea Delvescovo*
 

2020 was a difficult and complicated year for international tourism due to the Covid-19 pandemic which prevented travel and continues to severely limit mobility in 2021.

 

Like all countries in the world, Canada has not been spared from the virus and, in this article, we will try to understand how the epidemic has affected the tourism industry and how it is reacting to the crisis.

 

Canada and Tourism before the COVID-19 pandemic

 

2019 was a record year for Canada's tourism sector.

 

In 2019 Canada reached the highest level of international tourists, with 21.1 million visitors, 1.2% more than the 20.9 million the previous year.

 

The tourism sector represented over 2% of the gross domestic product and supported more than 1.8 million jobs in Canada, 56% of them in rural areas.

It was also an important source of revenue for all levels of governance, especially federal, provincial and territorial governments, which received 95.3% of tourism revenue in 2019, with the remainder received by municipal governments and aborigines.

Government revenue directly attributable to tourism increased 2.7% in 2019 to $ 29.7 billion.

Domestic tourism expenditure accounted for around three quarters (76.0%) of these revenues, while tourism exports accounted for the rest.

 

Tourism from Canada

 

Also with regard to travel by Canadians to other countries, up to 2020, the Canadian market was characterized by dynamic demand and a significant propensity for international travel.

 

The Canadian tourist pays close attention to the quality/price ratio. In the Canadian travel imagination, Italy and Europe are protagonists, but there are other potential competitors of the "Italy brand" and the Canadian dollar - euro ratio plays a significant role.

 

The favorite destination for Canadians

 

During 2019, Canadian residents made 313 million trips in Canada and around the world. 275 million were domestic trips, 27.1 million trips to the USA and 10.7 million to overseas countries, that is, all other states.

 

For over 60% of cases, holidays, leisure or recreational activities were the most common reasons for traveling abroad.

This is followed by visits to friends or relatives (26.7%), work reasons (6.8%) and all other personal reasons (3.6%).

Italy in 2019 was the fifth most visited country by Canadians in the world and the second in Europe.

The most popular overseas destinations visited by Canadians in 2019 were:

 

• Mexico (1.8 million visits)
• Cuba (964.000)
• United Kingdom (770.000)
• China (666.000)
• Italy (619.000)

 

According to the 2017 economic report carried out by the Enit-Toronto Office in collaboration with the Italian Embassy in Ottawa and the Italian Consulate General in Toronto, the favorite Italian regions of Canadians are:

• Lazio (importance of Rome)
• Veneto (importance of Venice)
• Tuscany (importance of Florence)
• Lombardy (importance of Milan)

 

The 4 big cities mentioned alone absorb a large part of the Canadian tourist flow to Italy. Followed by Campania (Capri and the Amalfi Coast) and Liguria (Cinque Terre).

 

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Focus on the tourism sector in Canada before the pandemic

• 2019 was a record year for Canada with 21.1 million international tourists welcomed
• Tourism accounted for over 2% of the national gross domestic product
• It supported more than 1.8 million jobs, 56% of which in rural areas
• It employed 1 in 10 workers
• Total revenue generated by Canadian and international travelers was $ 105 billion in 2019
• Nearly half of Canada's overseas travel spending, over 19 billion in 2019, went to countries other than the United States
• Italy was the 5th most visited country in the world by Canada and the 2nd in Europe

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Identikit of the Canadian tourist

 

From the cited ENIT economic report it emerges that the average Canadian tourist belongs to a medium / high socio-economic and cultural segment.

 

In terms of the factors that lead to choose a destination we find: price, safety, knowledge of languages, the efficiency of services, cost, level of organization.

 

The favorite and most renowned tourist products are art and culture, food and wine, sea, lakes, mountains, shopping, language courses and active holidays.

 

While the Canadian tourist's preferred means of travel are: plane, car and train, the types of accommodation vary from hotels to farmhouses.

 

Most Canadians get information on websites, catalogs and the specialized press, while for purchases they turn to tour operators, the Internet and travel agencies.

 

The Canadian government's new federal strategy for tourism growth

 

 “Tourism is profitable in all regions of the country because it creates good jobs for middle-class families. The Government of Canada is committed to increasing and diversifying tourism products and experiences to maximize the industry's potential year-round and coast to coast ”.

Mélanie Joly Minister of Tourism, Official Languages and La Francophonie

 

In 2019 the federal government presented the new tourism strategy, Creating Middle-Class Jobs: A Federal Strategy for Tourism Growth, which confirmed Canada's attention to the sector and its growth signals and with which it aimed to increase tourism flows by 25% by 2025, maximize the potential of tourism to stimulate economic growth and create new jobs in all regions of the country, since every community has something to offer and can be a tourist destination.

 

The strategy has an innovative approach oriented towards collaboration between industry and government, grants for product development and investment in tourism.

 

Three pillars are the basis of the Strategy:

 

1. The Canadian Experiences Fund (CEF), with an investment of $ 58.5 million in funding, provides all Canadian communities with the support they need to offer new or improved tourism products or experiences, or to create, renovate or expand tourist facilities.
   Canada's Regional Development Agencies (RDAs) will manage this fund over two years, which will be used to make targeted investments based on regional realities and priorities. These investments will allow the tourism industry to innovate and expand its activities.
   The CEF has received a high volume of applications and the amount of funding available has already been exceeded in some regions.
    
2. The creation of Tourism Investment Clusters ensures that all levels of government work together to invest more efficiently by responding to local priorities and identifying ways to increase investment from private sources.
    
3. “Tourism Industry Economic Strategy Board” will play the role of providing governments and industry leaders with a collaborative platform to find ways to address challenges.

 

These actions should have positioned the sector to achieve the objectives set in the Strategy by 2025 by 2025:

• Increase tourism inflows by 25% to reach $ 128 billion.
• Create new jobs directly linked to tourism corresponding to 7.3%, about 54,000 jobs.
• To stimulate the tourism economy to grow at a higher rate than the national economy.
• Increase international tourist arrivals by over 1 million in the winter season and in the low tourist density season.
• Increase the share of tourism spending generated outside of Montreal, Toronto and Vancouver, the three main cities where tourism is currently concentrated.

Although ambitious, these objectives were considered achievable. But in 2020, the pandemic drastically reduced tourist flows from all countries, including Canada.

 

Traveling to and from Canada during the pandemic

 

The Ottawa government has decided to apply travel restrictions and recommend Canadian citizens to avoid any non-essential overseas travel.

 

The Canadian authorities have imposed a ban on entry to foreign citizens, with very few exceptions.

 

In any case, those arriving or returning to Canada are required to submit their travel and contact information, including an appropriate quarantine plan electronically, using the ArriveCAN app.

At the arrival, everyone must observe a period of 14 days of quarantine and respect the official indications of the Authorities (for violators there are penalties of up to 750 thousand Canadian dollars and / or 6 months in prison).

 

Travelers arriving in Canada by land from the United States, starting February 15, 2021, must provide a negative COVID-19 molecular test result no later than 72 hours prior to arrival, or a positive test taken 14 to 90 days before the arrival. Moreover, starting February 22, 2021, travelers entering Canada at the land border will be required to take a COVID-19 molecular test upon arrival and again at the end of the 14-day quarantine.   

 

All travellers arriving to Canada by air, as of February 22, 2021, will be required to take a COVID-19 molecular test when they arrive in Canada before exiting the airport and another toward the end of their 14-day quarantine period. With limited exceptions, air travellers, will also be required to reserve, prior to departure to Canada, a 3-night stay in a government-authorized hotel.

 

These new measures are in addition to existing mandatory pre-boarding and health requirements for air travellers.
There are also some restrictions on travel between Provinces and Territories within Canada. For more information, please refer to the following official websites:

• Alberta
• British Columbia
• Manitoba
• New Brunswick
• Newfounland and Labrador
• Northwest Territories
• Nova Scotia
• Nunavut
• Ontario
• Prince Edward Island
• Quebec
• Saskatchewan
• Yukon

The measures reported are updated in February 2021. The latest Government of Canada information for travel is here. 
Also visit Destination Canada's COVID-19 Guidance for Travelers to easily access the resources you need to make informed travel decisions.

 

Source: Public Health Agency of Canada

 

Foreign travel by Canadians has plummeted although Covid-19 restrictions were eased over the summer in different parts of the country and it was possible to travel within Canada.

 

Even towards the United States, the most easily accessible destination for Canadians, citizens made only 269,000 round trips in October 2020, a drop of 92.3% compared to October 2019. While residents' travel of the United States to Canada in October 2020 were 93.9% less than in the same month of the previous year.

 

If we consider the inflows of foreign travelers to Canada in September 2020, the decline is 95.3% less than in the same month of 2019.

 

Ontario (-267,000), British Columbia (-118,700) and Quebec (-110,900) recorded the largest absolute decline in the number of overseas travelers in October.

The number of air arrivals decreased by 94.8% on an annual basis.

 

The analysis of the main indicators of the tourism sector in Canada
 

The 2019 figures will inevitably remain a record for some time, as all travel-related industries have been hit hard by the Covid-19 pandemic and continue to be affected.

 

The analyzes carried out, based on data and analyzes of the second and third quarter of 2020 by Statistics Canada, confirm that after the shock of the first half of 2020, in the third quarter of 2020 many indicators have begun a difficult recovery, even if to return to pre-pandemic levels we will have to wait.

 

Overall, employment in Canada increased 19.3% in the third quarter of 2020. However, as travel restrictions and physical distancing measures continued to be in place across Canada, the levels of the tourism economy remain below pre-pandemic values.

 

• Tourism spending in Canada increased in the third quarter but remained less than half (-52.9%) compared to the level in the fourth quarter of 2019.
• Spending related to international visitors alone increased by 28.2% in the third quarter, after a sharp decline in the second quarter (-97.1%) due to travel restrictions, but despite the significant quarterly growth, the expenditure decreased 97.0% compared to the fourth quarter of 2019.

 

Source: Statistics Canada

• The decline in tourism-related GDP in the second quarter of 2020 was six times greater than the decline in GDP of the economy as a whole (-66.4% versus -11.5%) and twice the total decline in employment nationally (-43.8% against -20.2%).
  In the third quarter we witnessed a marked recovery in GDP compared to the previous quarter (+ 62.6%). Despite this increase, tourism GDP remained 51.5% lower than in the fourth quarter of 2019.
   
• As for employment, the most pronounced declines in the first half of 2020 were in the tourism-related industries that traditionally employ a high percentage of part-time workers. In the third quarter of 2020, employment attributable to tourism recovered some points (+ 27.1%).
   
• Before 2020, tourism's share of GDP was between 1.9% and 2.4% and its share of employment between 3.7% and 4.5%.
  The progress made in the third quarter of 2020 was not enough to return to these levels. The GDP share fell to an all-time low of 0.6% in the second quarter and in the third quarter it represents 1%. While the employment share fell from 3.7% and then recovered to 2.8%.
   
• Tourism spending for transport decreased by more than three quarters (-77.5%) in the second quarter of 2020 compared to the first 3 months of the year.
  All forms of transport that require the physical proximity of passengers have suffered sharp decreases:
  • airplane (-94,9%)
  • train (-88,5%)
  • interurban buses (-79,1%)
  • Motor vehicles were the main alternative for tourists in the second quarter, however, fuel spending fell by more than half (-51.6%).

In the third quarter, despite more than doubling (+ 131.7%), air passenger transport remained the most affected expense category, with levels 89.9% lower than in the fourth quarter of 2019.

 

*Graduated in Languages and Communications for Tourism and Business,

Centro Studi Italia-Canada and Osservatorio Artico's Editor
 

Cover photo is courtesy of Destination Canada from The Brand Canada Library.
 

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