Sticker shock, border delays sour hopes for Canadian travel boom

OTTAWA, July 12 (Reuters)-Rising prices, border restrictions and airport chaos threaten hopes for a post-pandemic summer travel boom in Canada, halting tourism recovery and removing the luster in country as a destination, say analysts and industry executives. .

Tourism spending in Canada remains 34% below 2019 levels despite strong gains over the past year, official data shows. With most of the COVID-19 restrictions removed, the Canadian travel industry is hoping that 2022 will be the year when domestic tourism returns to normal volumes.

But gas prices have risen, weakening the outlook for road trips. Flying faces its own challenges: Canadian airports deal with stranded tourists, canceled flights and lost luggage. Others are stuck at home due to long passport processing hours. read more

As a result, the travel industry is preparing for a smaller-than-expected summer boom, which will delay the industry’s recovery for nearly a year, said Beth Potter, chief executive of the Tourism Industry Association of Canada.

“At this point, it looks like we’ll get there by the end of 2023, but we don’t know,” Potter said.

He added that “there is an incredible pent-up demand” for travel, but that has been hampered by high inflation and other challenges.

Before the coronavirus pandemic hit travel, tourism brought in more than C $ 100 billion ($ 76.7 billion) in revenues a year and accounted for more than 2% of Canada’s gross domestic product. Revenues are estimated at two-thirds of that level this year.

The biggest shortage is among international visitors.

Foreign air arrivals dropped by 50% in April 2022 compared to April 2019 and delayed same -day visits from the United States, which is key to many of the border town’s economies. Approximately 10 million people made same-day cross-border trips to Canada in 2019, and Potter estimates that current numbers are only half that level.

“At large border crossings in southern Ontario, they typically see 50 motor coaches on a weekend and now they’re averaging about two,” Potter said, adding a full recovery of those foreign visitors are not expected before 2025.

‘SYSTEM IS BROKEN’

Although Canada has relaxed pandemic restrictions, it still requires foreign visitors to be fully vaccinated and all travelers entering the country must use a public health app to upload vaccination documents and personal data.

In comparison, most European countries have lowered all coronavirus -related entry requirements, such as popular North American tourist destinations in the Caribbean and Mexico.

Canada needs to do more to fix issues with border travelers, said Perrin Beatty, chief executive of the Conference Board of Canada, a business lobby group.

“If what people hear from Canada is that the system is broken, they’re just going to go somewhere else where things work better,” Beatty said.

The federal government reiterated last week that it is working to improve efficiency at the airport. It has hired 1,200 border agents since April, added new customs kiosks and paused random COVID testing at airports to alleviate strain.

On the domestic front, travel spending increased after most of the restrictions on COVID-19 were removed earlier this year, according to RBC Consumer Spending Tracker.

“It’s not yet showing signs of deterioration, close to term,” said Nathan Janzen, a senior economist at RBC. “But it has stopped growing at a rapid pace.”

Inflation is cutting into consumers ’purchasing power, where travel is one of the first discretionary items to go, Janzen says. Interest increases intended to curb inflation add to the pinch.

Saskatchewan resident Craig Bott, who recently visited Ottawa with his family, said the long-planned trip turned out to be more expensive than expected and the flight delays were frustrating, which made them reconsider. considering plans for more travel this year.

“We talked, maybe, about doing something else in the summer, but I don’t think we would,” Bott said. “Maybe we’ll just go to the lake near the house, fisherman.”

($ 1 = 1.3033 Canadian dollars)

Edited by Deepa Babington

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