A third of tourism sector may vanish, industry warns
‘It could take two to three years before we recover to PRE-COVID levels,’ adviser says
Without sustained government aid, a third of Alberta’s tourism industry could permanently fold, an industry group said Friday.
With the summer season, which provides up to 70 per cent of the industry’s revenues in peril due to a halt to international travel, the wheels could come off a big chunk of the sector in the coming year, said Darren Reeder, board adviser with the Tourism Industry Association of Alberta.
“Thirty-three per cent are currently at risk of permanent closure due to the impact of COVID-19,” said Reeder, noting the industry counts 23,000 businesses.
“For those businesses that only operate throughout the summer months, there’s a high likelihood many won’t be able to make it through to the year 2021.”
Though foreign travellers make up only five per cent of visitor volume in Alberta, they account for 24 per cent of the sector’s revenue, he said. That’s nearly six times greater per capita than income generated by Alberta visitors, said Reeder.
He noted the Canada-u.s. border will remain closed to American visitors until at least July 21, adding there’s little optimism international flights will resume in time to salvage the lucrative summer season.
“It would be a blessing and a certain help if some of the international markets opened, but I don’t believe there are any businesses counting on their summer business, including the U.S.,” said Reeder.
Hotels that would normally be 65 per cent filled at this time are booked at 25 per cent capacity, he said, while cancellations have cost the lodging sector $330 million.
“It could take two to three years before we recover to PRE-COVID levels and there’s no certainty of that,” said Reeder.
Federal government emergency business and employment income supports have helped but are short term and what’s needed is more stimulus and measures to incentivize domestic travel, such as a $2,000 per household tax credit and the return of GST visitor rebates, he said.
The association is taking its rehabilitation plan to the province’s Economic Recovery Council next week after hastily drafting the blueprint, which “really demonstrates the need and urgency,” said Reeder.
Dewy Matthews said the international travel lockdown has clobbered his outdoor guiding business in the foothills southwest of Calgary.
Several European bookings and a party from the U.S. that’s used his services without fail since 1992 have cancelled in a sudden slump that’s cost his Anchor D Guiding and Outfitting Ltd. $60,000, he said.
“If people would’ve told me before that COVID would have crashed our industry I’d have been shocked, but it’s happening,” said Matthews.
For now, his business will cater to much shorter day trips for Albertans but isn’t sure that’ll be enough to purchase the hay to feed his 115 horses, among other expenses.
“I hope like hell it works out, but I don’t know how this summer’s going to play out,” said Matthews.
After 36 years in the tourism business, the veteran outfitter said it’s clear to him how widespread the abrupt hit to the industry has been.
“It’s a ripple effect to hotels to restaurants and even people who drive trucks to supply those,” said Matthews.
Calgary’s $2.5-billion hospitality industry has been severely battered by COVID -19, with the most noticeable symptoms so far being a slew of restaurant closures, said Cassandra Mcauley, spokeswoman for Tourism Calgary.
“A lot of our tour companies are having challenges because visitors aren’t there to support them,” said Mcauley, who welcomes the Alberta tourism association’s lobbying.
“It’s important that there is a recognition the industry needs help, it’s crucial.”
Tourism Calgary, she said, has its own phased-in recovery plan that’s appealing to Canadians who are also unable to travel abroad.
“A big driver is going to be visiting friends and relatives and that’s what we’re going to be focusing on,” said Mcauley.
But she said it’ll be difficult to compensate for the cancellations of huge events like the Stampede, Calgary Folk Music Festival and Spruce Meadows tournaments.
“It’s going to take a lot of time to recover,” said Mcauley.
“But we’ve seen a remarkable amount of resiliency and innovation among businesses that’s going to be vital in that recovery.”
She said the hotel sector in the city is coming back to life, signalled by the reopening next week of the Fairmont Palliser Hotel and bookings in lodgings outside the downtown “that speak to that visitation to friends and relatives.”
In 2017, Alberta’s tourism industry generated $8.9 billion in revenues.