Despite a setback from the Omicron wave, which curtailed global travel amid additional vaccine restrictions and advisories to not travel, the tourism sector looks to rebound sharply in the coming months.
The revival is expected to be driven by broad lifting of COVID-19 provincial public measures across the country, including capacity restrictions on large gatherings and events such as conferences, concerts and sporting events, and the removal of onerous testing restrictions on international travel for fully vaccinated travellers both inbound and outbound travel.
Removal of pre-entry test requirements were announced March 17 and take effect April 1. Pent-up demand for travel and high levels of consumers’ savings are likely to buoy visits to Canada, while conflict in Europe may also shuffle tourist dollars to Canada.
While conditions are improving, it is a deep hole for the pandemic-battered sector to climb out of. Non-resident tourist visits to Canada rose sharply through the second half of 2021, and by December the country posted 663,353 visits by various modes of entry. This dipped to 360,900 in January but will rebound. December levels compared with 83,000 in same-month 2020 but remained only 35 per cent of same-month 2019.
Similar patterns have been observed in B.C. Tourist entries recovered to 156,278 persons in December, which was 30 per cent of levels observed in December 2019. U.S. visits were 34 per cent of December 2019 levels, while overseas visits reached 23 per cent. The pace declined to 121,880 in January.
Increased inflows of international tourists will provide a needed boost for hotel accommodations and food services, which remained below pre-pandemic trends and were constrained by Omicron trends in late 2021 and early 2022. While high domestic tourism lifted activity during the summer, hotel occupancy rates have remained weak in the shoulder season. Hotel occupancy rose to 49.7 per cent in December, compared with 27.3 per cent in same-month 2020 and 56 per cent in December 2019. Metro Vancouver remains well off pre-pandemic levels.
The latest quarterly population estimates pointed to a strong recovery in B.C. through 2021’s fourth quarter. Population increased 0.3 per cent (14,850 persons) to 5.264 million persons, with year-over-year growth of two per cent•
Bryan Yu is chief economist at Central 1 Credit Union.
