Toronto’s tourism industry in $8.35 billion deficit since pandemic, report says

On the whole, Canada’s tourism decline is 'worse than September 11, SARS, and financial crisis combined.’
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TORONTO — A report from Destination Toronto estimated that the city suffered a $8.35 billion shortfall in the tourism and hospitality sector in the past 12 months due to reduced consumer spending, business closures, and travel restrictions. When the entire Greater Toronto Area is taken into account, the loss is over $14 billion, Global News reported

“Prior to the pandemic, Toronto had been riding a wave of momentum and experienced annual growth in visitor spending for over a decade,” Scott Beck, president and CEO of Destination Toronto told Global. 

PHOTO: Courtesy of Destination Toronto

The analysis also comes from the visitor economy study released in 2019 by Tourism Economics, whose study found that visitors to Toronto generated $10.3 billion and 70,000 jobs in the tourism sector, according to Global.

It turns out that Toronto’s visitor economy is the lifeblood of the tourism and hospitality industry.

“Every year, 27.5 million people visit Toronto. Those visitors fuel what’s called the visitor economy – a term much broader than tourism,” Destination Toronto stated.

“Toronto’s visitor economy encompasses the direct visitor spending in the destination and the indirect and induced economic activity that stems as a result.”

Beck said that the city’s once-flourishing meetings and events industry was devastated by the pandemic. 

463 conferences and events were either cancelled or postponed since the start of COVID-19, resulting in a $833 million loss in the sector alone. Without the 380,000 attendees, customer traffic in retail shops, restaurants, attractions, and hotels has also suffered, Beck told Global. 

PHOTO: Courtesy of Destination Toronto

Despite the bleak figures, Beck harboured optimism for the city’s resilience and its capacity to bounce back from the recession.

“The foundation of our past success, rooted in the quality of our city’s experience, gives us confidence in the inevitable recovery of our industry.”

Zooming out for the panoramic view of the entire country, the situation is bleak for the whole of Canada’s tourism too. Destination Canada estimated a $19.4 billion loss in 2020, and  has described the predicament ‘’worse than September 11, SARS and financial crisis combined.”

“Tourism has a ripple effect into so many other parts of our quality of life as Canadians,” Marsha Walden, president and CEO of Destination Canada, told CP24. “It’s one of those very few industries, maybe the only one, that can be found in every corner of this country.”

Destination Canada performed original research and used data released in government and industry reports, according to Walden. The study offers insight into how much time different segments of the Canadian economy will need to recuperate from the recession. 

Active businesses — those operating and has workers — declined by 9% between January and November 2020. Overall, half a million people in tourism lost jobs in Canada, Walden said.

According to CP24, Destination Canada’s findings doubles as a catalyst for citizens to rescue the tourism industry by taking domestic holidays once safe to do so. Vacationing within instead of beyond Canada’s borders would accelerate the domestic tourism sector’s recovery by one year, the report stated.

“Canadians have been sitting at home, saving a lot of money this year, which is great for individuals and not so great for the economy,” Walden told CP24. “We really need them to get out there and travel the country and spend money across the country once it’s safe to do so.” 

 France, the most-visited country in Europe, suffered a $42.036 million loss in its tourism industry in 2020 (PHOTO: Courtesy of Roman Kraft/Unsplash) 

Canada, however, was not the only country whose tourism industry was battered by the pandemic. 

The US sustained the most significant revenue loss in the world, according to Travel Pulse, with the pandemic costing its tourism sector US$147.245 billion in the first ten months of the pandemic. 

Spain saw the highest decrease in tourism compared to any other European country, having lost US$46.7 billion. The country hosted fewer than 20 million foreign visitors, according to Travel Pulse. France typically hosts over 89 million tourists annually, but the most visited country in the world saw a US$42.036 million revenue loss in 2020.

PHOTO: Courtesy of SaveHospitality.ca

Globally, the tourism industry lost US$935 billion due to COVID-19, NI Travel News reported.

In February, the Canadian government announced it will invest $100 million to support women who have been impacted by the pandemic, offering financial aid for current and aspirational entrepreneurs.

Hundreds of domestic restaurants have also formed the SaveHospitality.ca advocacy group to encourage Canadians to patronize local restaurants and bars. 

The coalition demands better provincial and federal support for independent businesses to save the food service industry, valued at $90 billion and accounting for 4% of Canada’s GDP.

“Restaurants are a high-labour, low-profit business,” John Sinopoli, one of the coalition’s co-founders, said in a press release

“To generate $1 million in sales, restaurants require an average of 14.9 workers. This compares to 1.2 workers for gas stations, 4.3 workers for grocery stores, and 6.9 workers for clothing retail stores.”

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