B.C. tourism sector seeks $680m stimulus package from province

Before the pandemic, tourists pack Victoria's Inner Harbour | Photo: Bruce Stotesbury, Times Colonist

B.C.’s tourism and hospitality sector is seeking a $680-million stimulus package from the provincial government to assist the businesses and workforce devastated by the pandemic and its crippling travel restrictions.

The Tourism Industry Association of B.C., which represents more than 19,000 tourism and hospitality businesses, said Tuesday it wants the province to allocate the funds from its $1.5-billion recovery fund as an initial investment to help mitigate the unprecedented impacts of COVID-19.

“The existing suite of packages aimed at the overall economy are appreciated and helpful, but not sufficient to sustain the B.C. tourism and hospitality sector for the foreseeable future from this unexpected pandemic,” Vivek Sharma, chair of the Tourism Industry Association of B.C. said in a statement Tuesday.

“The only way we can prevent generations of lost economic activity, jobs, and tax revenues is by acting decisively now with innovative and creative solutions that recognize the importance of this sector, which is the face and brand of British Columbia to the world and one of the strongest drivers of B.C.’s economy.”

The association noted that in 2018, the latest statistics available, the tourism and hospitality industry had more than 19,300 businesses, generated more than $8.3 billion in provincial GDP and $4.5 billion in direct tax revenues from $20.4 billion in direct visitor spending, and created employment in tourism-related businesses for more than 300,000, half of whom service visitors in every community of the province.

As the only industry almost entirely based on the discretionary movement of people, the tourism and hospitality sector has been the most severely impacted by COVID-19 due to business closure orders and restrictions on personal travel, as well as the closure of international borders, said the tourism association.

It said virtually the entire sector was shut down resulting in extensive layoffs, with many businesses having closed without the cash flow to re-open, and thousands more desperately trying to maintain solvency.

Despite the start of Phase 3 reopening on June 24, most sector businesses have only partially re-opened.

The tourism association has a bleak economic outlook. It said the best-case projections will see a $14.8 billion (69 per cent) decline in tourism revenue from $20.4 billion in 2018 to $6.7 billion in 2020. “This severe loss in revenue, which could be significantly greater, will have reverberating impacts on jobs, government revenues through taxes, and the ability to re-invest in the sector for a more resilient, sustainable future,” the association said.

The recovery stimulus package proposed by the tourism and hospitality sector has three components:

• A Working Capital Recovery Grant ($475 million) to help sustain and maintain solvency for businesses that have prospects to return to profitability in the medium term (i.e. 18 months). This could include the provision of low or no-interest loans with an extended payback period. As the timing and magnitude of out-of-province visitors is uncertain, the immediate priority would be to sustain businesses that normally rely on these visitors and generate significant revenues for the visitor economy, as well as businesses that play central roles in attracting visitors to a community or a region.

• Support for Adaptation Costs ($190 million) that would provide funds to help businesses adapt their operations to the health and safety requirements of COVID-19 and protect their workforce, visitors, residents and local communities; and develop innovative ways of delivering tourism experiences to augment and accelerate recovery.

• Support for Developing Resilient, B.C.-focused Supply Chains ($15 million). The goal would be to support industry subsectors (accommodation, attractions, transportation, food services, and retail) refocus their supply chains and forge new relationships with B.C. suppliers, to create supply chains that will not only promote recovery over the next 18 months, but also contribute to the industry’s resilience going forward.

The proposal also recommends a joint industry-government task force to work alongside existing industry organizations and networks to finalize funding parameters, application processes, and monitoring and evaluation mechanisms. The task force would include participation by the B.C. Ministry of Tourism, Arts and Culture, the Ministry of Jobs, Economic Development and Competitiveness, and the Ministry of Finance.

“For decades, tourism has been a strong and consistent economic engine for the province and significant source of employment in every B.C. community,” said Sharma. “What we are asking for is a return on the contributions the tourism and hospitality sector has made to the provincial and national economy over those decades. Essentially, we need an initial investment of $680 million to save an industry that is worth more than $20 billion per year. Without this support, our sector could see upward of 100,000 jobs lost in 2020 and thousands of businesses permanently shuttered.”

To view the proposed tourism and hospitality sector recovery stimulus proposal, see tiabc.ca.

Times Colonist