Visitors pumped billions of dollars into Toronto’s economy last year, a new study shows, but tourism is still not reaching pre-pandemic levels as signs of a slowdown emerge.
Some 26.5 million visitors visited Toronto in 2023 and spent $8.4 billion — most of it on hotels, restaurants and transportation — according to a report from Tourism Economics.
However, tourist numbers have not reached the peak level of 2019, when 28 million people visited the city, according to tourism organization Destination Toronto, which commissioned the study.
Last year, 88% of visitors were Canadian, while almost 7% came from the United States and 4.5% from overseas. The percentages for the latter two were higher before the pandemic.
While spending in 2023 slightly exceeded pre-pandemic levels, this is largely due to inflation, said report author Tariq Khan.
Growth also appears to be running out of steam. Hotel bookings in May fell compared to the previous year, noted Andrew Weir, president and CEO of Destination Canada.
“The recovery is still far from complete and is uneven,” he said in an interview.
“‘Revenge travel’ was great for a while,” Mr. Weir said, referring to the surge in tourism that followed two years of pent-up demand caused by the COVID-19 pandemic.
“It’s not a straight line. Growth is returning, but it is slowing. »
A Taylor Swift effect?
However, the industry is hoping that at least one event this year will mark the start of a new era: the arrival of Taylor Swift.
The great pop star is expected to arrive in town for six concerts at the Rogers Center next November. Hotel reservations for the month — typically a slow time for reservations — were up 300% in early June compared to last year, Weir noted.
But even the legions of “Swifties” may not be able to counter the tourism drag caused by inflation and rising interest rates.
“Family budgets are increasingly reduced, which translates into spending [moins] discretionary, including tourism,” explained Mr. Weir.
A sharp drop in visitors from China — Toronto’s number one tourism market with more than 300,000 arrivals in 2019 — also affected the numbers. This sharp drop stems from China’s decision not to add Canada to its list of countries authorized as travel destinations for tourist groups, even though the United States, the United Kingdom, Australia and other Others appeared on the list last summer.
“It allows groups to hold meetings here and businesses to travel here,” Weir said, noting the “diplomatic issues” that have prevented Canada from becoming an approved destination.
“These were high-yield travelers,” he added. If you have to fly 12 hours, you stay a long time and do a lot of things at your destination when you arrive. »
Slow rebound in business conferences
However, leisure tourism has rebounded more than business tourism. The slow return of trade conferences and business travel more generally largely explains the plateauing of tourism this year.
Destination Toronto held 71 major conferences and events last year, well below the more than 100 gatherings in 2018. The 2023 events attracted 290,000 business delegates — many of them visitors — who spent an estimated $400 million. dollars, which demonstrates the disproportionate economic contribution of conventions, underlined Mr. Weir. But this figure pales in comparison to the 800 million spent six years earlier.
“Some of the major meetings just haven’t fully returned,” he said.
Canada’s more gradual lifting of health and travel restrictions in the years following the pandemic could also have cost it some major event bookings, since major conventions are booked up to seven years in advance .
“A lot of meetings that are happening in 2023-24-25 and 26 were booked in 2021. And in 2021, no US meeting planners chose Canada. Our border was closed,” recalled Mr. Weir.
At the same time, individual business travelers and small corporate groups are increasingly opting for video calls rather than costly and time-consuming on-site visits.
“Things like this have changed forever,” Mr. Weir said.
Study finds tourism supported nearly 47,300 jobs directly — and about 20,000 more indirectly — in Toronto last year, making it even more critical for operators to pursue new markets and develop the sector.
“If we only sell within the Toronto or Ontario economy, then you’re not growing, you’re just moving money within those economies,” Weir said.