Tourism survey reveals industry optimism despite challenges
Peter Shokeir | email@example.com
Tourism businesses are optimistic about what 2022 will bring, according to a first-of-its-kind survey from the Tourism Industry Association of Alberta.
The pandemic made 2021 a difficult year for many organizations, with 75 per cent indicating they were negatively impacted, but three-in-five organizations were nonetheless at least somewhat optimistic about their outlook for 2022.
Darren Reeder, board advisor for the Tourism Industry Association of Alberta, said this high level of optimism about 2022 was revealed despite the survey having been conducted earlier this year while health restrictions had still been in effect.
“I’m suggesting if we were to ask that same question today, I would expect that to be a much higher confidence interval than when we did the survey back in February.”
The Canadian Rockies have the highest level of optimism with nearly three-in-four operators expressing some level of optimism.
“With our mountain park partners, they tend to get the early benefits of international travel,” Reeder said.
The greatest uncertainty was in the Calgary market, where 53 per cent were uncertain.
“They are so dependent on large-scale meetings and conferences and conventions, and that business is going to be very slow to come back as we start to see restrictions become completely relaxed,” Reeder said.
A total of 187 responses from across the province, including 26 per cent from the Canadian Rockies, were received for the Tourism Business Conditions Survey.
Even though respondents expressed optimism, notable concerns about 2022 included labour supply shortages.
Most organizations were still operating with at least 60 per cent of the staff they had prior to the
pandemic, with 10 per cent having more staff than pre-pandemic.
Tourism HR Canada forecasted it could take up to 10 years to rebuild the pre-pandemic labour capacity.
“This is not a new issue, but what has happened is it’s taken a structural deficiency in the labour talent development pipeline and put it into a full crisis,” Reeder said.
While the demand has returned naturally as it had in previous economic crises, the labour supply has not come back with many people leaving the industry entirely.
“If they were working in the food and beverage sector, they got tired of being promised shifts, having to deal with all the new restrictions, be on the front lines and dealing with people’s frustration with why they have to wear masks and follow other protocols,” Reeder said.
“So, it’s been a very destabilizing impact on our industry, the consequence of having to manage all these health restrictions during COVID.”
The Canadian Rockies had a unique set of challenges when compared to other regions with former foreign employees returning home or unable to come to Canada/unwilling to travel.
In addition, a majority of the organizations (69 per cent) express some concern or lack of control regarding the supply chain issues.
Food and beverage services expressed the most concern out of any sector, that the rising costs and shipping delays would undermine their ability to plan for 2022.
“We’re starting to see some very notable increases in pricing in food and beverage products, and I think we’re going to continue to see that as the supply chain remains a bit broken,” Reeder said.
He noted this concern could be mitigated by relying more on local producers, creating more economic opportunities out of a crisis.
Operators are also facing insurance premium increases.
Thirty-four per cent of respondents saying this would impact their ability to purchase inventory and supplies as well as respond to wage increases.
“We’ve heard stories of some in the industry that have experienced flat-out denials—they can’t get reinsured other than by seeing premium increases of 100, 200 and 300 per cent,” Reeder said.
“And we’ve also heard really unfortunate stories of the fact that some people could not get insurance at all and chose to take risks.”
Another notable recovery risk was debt.
About half of the organizations have taken on COVID-related debt, with 34 per cent increasing their debt by over 50 per cent from 2019.
Most believe they will be able to pay off the debt at some point, but about one-in-five are unsure how they will service their debt in the future.
“All of this is to say that even though we’re starting to see some recovery this summer, this industry has to dig itself out of a debt hole,” Reeder said.
“And the only way we’re going to be able to do that over the next two-to-three years is if there’s predictable access to international visitors and we return to pre-COVID levels as soon as possible.”