How rising gas prices, inflation spark worry for Ontario’s COVID-battered tourism sector

Ontario’s tourism business operators are hoping for plenty of visitors this year with summer vacations just around the corner, but soaring gas prices, inflation and lingering COVID-19-related travel restrictions are creating major worry for the months ahead.

“We’re seeing cancellation after cancellation after cancellation particularly in our border towns and in northern Ontario who rely heavily on that ‘rubber tire’ tourism, particularly from the United States and that’s really, really concerning for us,” Christopher Bloore, the president and CEO of the Travel Industry Association of Ontario, told CityNews in an interview on Thursday.

“[It’s] going to take a toll on those businesses that have taken on debt during this pandemic period, that have hired staff, they’re really not going to be seeing the increases in revenues that they expected and that’s going to have an impact on people making whether they’re going to stay in business or continue their business.”

He said when it comes to the pressures facing the province’s tourism sector, some areas are seeing up to a 50 per cent cancellation of previously scheduled bookings.

Looking specifically at the U.S., Bloore said nearly 62 per cent of all visitors to Canada (roughly 13 million out of 21 million people) came from south of the border.

“Americans stay longer and they spend more when they’re here, so they’re a huge part of our business model as an industry moving forward,” he said.

He said travel restrictions at the border for unvaccinated individuals are adding to the woes. Bloore called for an implementation of eased measures similar to what’s being seen in certain European countries, saying domestic travel alone is not enough to provide the support needed.

“I’m seeing now more businesses at risk from closure in this period of recovery than I did in lockdown,” he said.

“This is a problem that’s not going away and we need to take action.”

Bloore said gas prices and inflation are front of mind for many too.

Opher Baron, a distinguished professor of operations management and the academic director of the MMA program at the University of Toronto’s Rotman School of Management, recently told CityNews increase summer usage of gas, overall rising economic activity and the war in Ukraine are all factoring into the cost of fuel.

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He added inflation is causing the cost of everything reliant on transportation and the supply chain to go up too.

“This is not a perfect storm, but it’s getting close to being a perfect storm in the sense of increasing gas prices,” Baron said.

Despite it all, and while the city of Ottawa’s tourism sector has experienced the same pain, there are signs of hope as well.

“We’re coming off of the most difficult two years that tourism has seen in this city in the history of tourism,” Catherine Callary, the vice-president of destination development at Ottawa Tourism, told CityNews.

“Leisure travel is coming back quite nicely and so we’re really pleased to see that, that’s a real positive element. So the pent up demand is translating into bookings.”

She said her organization has turned to promoting the capital’s seven national museums and 76 unofficial museums this summer. There’s also a promotion where if people buy two nights at a hotel, they’ll get a third night free — a push to get people to stay in the city longer by saving on accommodation costs.

Callary said approximately 90 per cent of the tourists that visit are from across Canada while five per cent are from the U.S. and five per cent come from other international destinations.

Both she and Bloore have praised Ontario’s so-called staycation tax credit for getting Ontario residents to travel throughout the province. But there are calls to redouble efforts to bring back business travel and conferences as well as group travel through investing in tourism incentives. There are also concerns about the ongoing labour shortage affecting many people.

“We’ve got the quality of product across the province, we just need to back that up with the dollars to bring more people into Ontario,” Bloore said.

He also said more needs to be done quickly to create affordable housing for workers,

“If we can’t house those workers near those jobs, we’re going to lose those people because it’s just too expensive to be within our industry,” Bloore said.