The tourism industry will probably not have regained all the lost ground until next year, Destination Canada predicts, even if the recovery is already more vigorous than expected.
In a new report, the Crown corporation predicts that the number of overnight leisure and business visits to the country will be 2% lower in 2023 compared to 2019 thresholds. Its projections predict that in 2024, this number will exceed pre-pandemic figures by a hair.
Destination Canada, which promotes tourism across the country, said nominal spending in the sector will reach $109.5 billion in 2023, surpassing 2019 thresholds of around $105 billion.
The total for this year, however, has been fueled by inflation and is expected to reach about $122 billion to match pre-pandemic spending in constant dollars, according to the Bank of Canada’s inflation calculator. “Spending was obviously supported by inflation,” admits Meaghan Ferrigno, head of data and analytics at Destination Canada, in an interview.
Measured in real terms, revenues from the tourism industry may not reach those of 2019 for two or three years, she adds.
A positive point is the importance that many still place on travel, even if interest rates put more pressure on disposable income.
“Travel remains a key priority for consumers. Even in today’s economic climate, international consumers are devoting more of their wallets to experiences rather than goods. This is what really supports the recovery,” explains Mme Ferrigno.
The report estimates that the tourism sector has the potential to reach $160 billion annually by 2030. “Capacity constraints”, however, could limit this total to $140 billion, “which, when adjusted for inflation , represents no real growth.”
The projected annual growth rate of the tourism sector is almost 6% until 2030, which is expected to be higher than economic growth in Canada, according to the report.
On the other hand, this pace seems slow when we take into account global tourism revenues, which are expected to increase by more than 7% per year.