Time for a ‘health check’ on the tourism industry as summer winds down

August 26, 2021
Jock Finlayson

As the summer winds down, it’s an opportune time for a ‘health check’ on the tourism industry, one of B.C.’s biggest employers and – in normal times -- a vital source of export earnings. Globally, the seemingly endless COVID-19 pandemic has wreaked havoc with tourism. No industry has been hit harder by the virus. The economic and human cost has been significant.

From a Canada-wide perspective, the period since early 2020 has seen unprecedented declines in most tourism-related performance indicators. International visitor arrivals are down by 85 per cent. Airline industry revenues have plunged by roughly 90 per cent. No cruise ships have docked at Canadian ports-of-call in the last 18 months. In-person conventions, trade shows, conferences, festivals, fairs and exhibitions have largely disappeared. Travel to and within Canada for business meetings has shriveled to almost nothing. The overall result is that some 500,000 jobs have been lost in industries that are part of the broad Canadian tourism sector.

Before the pandemic washed onto B.C.’s shores in March of last year, tourism and hospitality businesses collectively were reporting almost $23 billion in annual revenues and provided more than 300,000 jobs across the province. These figures plummeted in the spring and early summer of 2020, before staging a partial rebound in the latter half of the year that has extended into 2021. But business volumes for most tourism operators are far from having fully revived. The recent re-opening of the border to vaccinated Americans is a rare glimpse of sunshine at a very dark time for B.C.’s tourism industry. Unfortunately, the terrible wildfires that have gripped the interior this summer have slowed the rebound in activity.

Looking across the sector, the dramatic drop-off in international travel undoubtedly counts as the biggest blow to B.C.’s tourism industry, hammering Metro Vancouver hotels, resorts and fishing lodges, high-end restaurants, touring companies, visitor attractions, and much else besides. Compared to other provinces, B.C. is particularly dependent on international visitors. In 2019, they generated close to 40 per cent of all revenues for B.C.’s tourism sector, with the rest coming from spending by visitors from other parts of Canada and British Columbians travelling within the province. The recovery of international travel is expected to be a long and bumpy process, especially if COVID-19 becomes endemic and some of the extra border restrictions put in place since early 2020 persist. It may take several years for the global and North American tourism marketplaces to return to anything like normal.

Amid the pandemic-induced slump, the federal and B.C. governments have provided crucial support to tourism operators and employees. This includes grants and low-interest loans, wage subsidies, financial contributions to eligible businesses to cover a portion of rent costs, and payments for displaced and unemployed workers. In July, the B.C. government also earmarked funding to support “anchor attractions” that are important in drawing visitors to the province and to various local communities. Grants of up to $1 million are available to selected “anchor attractions” in both urban and rural areas, as well as to tour bus operators. This targeted assistance should enable more B.C. tourism businesses to survive until better times (hopefully) materialize in 2022.

As policymakers look to pare back financial assistance provided to industries hurt by the pandemic, tourism will continue to merit special attention given the extent of the damage inflicted on the sector in the last 18 months. For B.C.’s tourism industry, the impact of COVID-19 has been greater than 9/11, SARS, and the 2008-09 global recession combined. Apart from continuing to support anchor attractions, a near-term priority should be to establish incentives to encourage domestic leisure travel to partly offset what is expected to be a slow recovery for international tourism, business travel, conferences and conventions.

As published in Black Press.

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