BC Business
Without government support, the collapse of the visitor economy in B.C.'s cities will have a devastating impact on the rest of the province.
A food stall at the Richmond Night Market. Like Vancouver and Victoria, Richmond has seen tourism fall dramatically since the COVID-19 pandemic began
As the summer draws to a close and the provincial government nears a decision on how to allocate its $1.5-billion recovery package, it would be easy for some people to make the false assumption that a strong August for some tourism operators means the B.C. tourism sector is on the road to recovery. Nothing could be further from the truth.
Unlike the forestry, mining, technology and manufacturing sectors, which have remained open for global trade, tourism is the only industry that has been virtually shut down by government, thanks to the closure of our borders to international travel.
Although that was the right thing to do to keep us safe, it has crippled thousands of tourism businesses and jobs reliant upon international visitors. Our cities have been particularly hard-hit. When our airports and borders closed to global travel, our cities lost their most lucrative markets. Travellers from the U.S. spend twice as much as domestic travellers and non-U.S. international travellers three times as much. As our peak season winds down, it’s now clear that revenue from local travellers and staycations will never come close to making up for the millions of international travellers we’ve lost.
Cities play a distinct role the visitor economy. They are strategic gateways to communities across the province. In a highly competitive world, they are the front door attracting visitors, critical investment and human capital. Transportation hubs and convention destinations, they are centres of major tourism infrastructure.
Tourism businesses in our cities are in serious trouble, and this is the canary in the coal mine for the rest of the province. One of the most important measures of the tourism sector’s health is hotel occupancy rates in our larger cities. Before COVID-19, yearly hotel occupancy in Greater Victoria and the Lower Mainland was in the range of 75 to 80 percent. Year-to-date, Greater Victoria hotel occupancy is 34 percent. In Vancouver, it sits at 26 percent for the summer. And in Richmond (which had the highest hotel occupancy in Canada over the past few years), it’s even lower.
Through July in our provincial capital, a city where two in five working people are employed directly or indirectly in the visitor economy, tourism revenue is down a staggering 68 percent from 2019. That shortfall has serious implications. The projected economic losses for tourism in Metro Vancouver add up to $9.8 billion in visitor spending, $5.8 billion in gross domestic product, $2.6 billion in taxes to government and 72,000 full-time-equivalent jobs. And if tourism businesses fail, there will be no jobs for these people to return to next spring.
In B.C., cities anchor the province’s visitor economy, which is an industry of industries—hotels, attractions, airlines and airports, retail, restaurants, festivals, conferences and events. All of these businesses are interconnected and have a direct impact on a vital supply chain that includes food and beverage providers, farmers, caterers, transportation and construction, to name just a few. This entire economic network is at risk if the visitor economy is severely damaged. We are already seeing the impacts in our communities.
The potential loss of tourism amenities, experiences and infrastructure should concern all British Columbians who value their quality of life and their jobs.
Tourism Vancouver, Tourism Richmond and Destination Greater Victoria support the Tourism Industry Association of British Columbia‘s $680-million proposal to preserve our vital tourism businesses until next year. A strategic investment as part of the provincial and federal governments’ economic recovery plan will be the difference.
Without government help, we’re at risk of seeing large-scale business failures in world-class B.C. tourism destinations. And business failures in our gateways will have a domino effect, negatively impacting businesses in more remote parts of the province.
Paul Nursey is CEO of Destination Greater Victoria, Royce Chwin is CEO of Tourism Vancouver, and Nancy Small is CEO of Tourism Richmond.
The B.C. visitor economy is one of the largest sectors in the province, employing 300,000 people—160,000 of them in jobs reliant upon international travel. Before the COVID-19 pandemic, U.S. and international travellers fuelled an industry that has contributed more $20 billion annually to the provincial economy.