To say that the province’s tourism sector has been hit hard by the COVID-19 pandemic would be an understatement. From April 2020 through late fall, the number of international visitors to B.C. plummeted by 96 percent from the year before, while hotel average occupancies tumbled 70 percent and average room rates declined by almost half. Year-over-year employment in food and beverage services fell by 37 percent, in accommodation by 46 percent, and in arts, entertainment and recreation by 48 percent.
The pandemic has changed global tourism in ways that are profound and likely long-lasting. Prior to 2020, tourism in B.C., as in much of the world, enjoyed a long period of rising visitor numbers and steadily growing revenues. But the pandemic transformed the landscape in ways that were previously unimaginable. Extended border closures, cancellations of cruise seasons, widespread public hesitancy to travel, and the introduction of new public health protocols are just a few features of the new reality in tourism.
Even optimistic projections do not envision the Canadian domestic tourism market returning to pre-2020 levels before 2022 or 2023, while international markets will take much longer, perhaps to 2026 or 2027, to recover. Leisure travel is expected to rebound more quickly than business travel. Indeed, some analysts believe business travel will be affected permanently, with 20 percent it never coming back.
Since the start of the pandemic B.C., tourism operators and their workers have looked to governments for financial support. Some, appropriately, has been provided, but it cannot continue indefinitely given the scale of government deficits currently being incurred. Moreover, clever and better-funded marketing campaigns by themselves cannot restore visitor demand. If the B.C. industry is to emerge positioned for long-term success, it must act to address its weaknesses, embrace innovation, and develop new tourism assets and experiences. In short, we believe the time is right to shed some of the sector’s traditional reliance on marketing and work toward crafting a post-COVID industrial strategy.
Developing an industrial strategy for B.C. tourism would require long range thinking and planning that draws on successful practices from other industrial sectors, such as advanced technology, film and television, agri-food, and energy. It would identify the roles that government can play and the tools it has at its disposal, such as taxation regimes, investment incentives, and infrastructure programs, to facilitate the sector’s growth.
An industrial strategy would address the many key issues that will shape the prospects for tourism in B.C. Here we highlight four:
- Creation of policies that enable the preservation and enhancement of iconic attractions which draw visitors to a region and, in turn, sustain smaller allied tourism businesses.
- Development of new tourism infrastructure - especially infrastructure that connects tourism with other sectors. For example, B.C. is a major global film and TV production centre and is home to the largest visual effects (VFX) cluster in the world. The province could explore the establishment of a new museum/centre of screen-based media that would provide a world-class tourism attraction, serve as a springboard for regional film-tourism, and showcase B.C.’s expertise.
- Strategies to leverage and manage the oncoming rush of automation and AI tools that are predicted to improve tourism operator efficiencies but also trigger significant workforce adjustments.
- Implementation of policies that facilitate the growth of larger B.C.-based tourism businesses which are more resilient to shocks and better equipped for post-pandemic expansion. The pandemic has revealed the economic fragility of sectors like tourism in which the vast majority of businesses are small or micro enterprises.
We believe the B.C. tourism industry can come out of the pandemic with renewed dynamism and regain its place as a major contributor to the provincial economy. However, to do so, the sector and provincial policymakers will need to collaborate and act with foresight. Forging a forward-looking tourism industrial strategy would be a good first step.
Jock Finlayson is a Senior Advisor with the Business Council of British Columbia. Ed Mansfield is President of Mansfield Consulting.
As published in the Vancouver Sun.