- In the fourth quarter of 2022, tourism spending in Canada increased by 2.1%, and its GDP and jobs attributable rose by 2.1% and 1.5%, respectively.
- Passenger air transport contributed the most to the growth in tourism spending in the fourth quarter, followed by recreation and entertainment and non-traveling products.
- Tourism spending by international visitors increased by 17.5% while spending in Canada by Canadians decreased by 2.6%.
Editor’s Notes: In this report, we have used data from the Statistics Canada website.
Tourism spending and employment generated by it in Canada increased in the fourth quarter of 2022, according to the National Tourism Indicators Report released by Statistics Canada. The report highlights the impact of the ongoing COVID-19 pandemic on this industry, which is showing signs of recovery.
Tourism Spending in Canada
Tourism spending in Canada grew by 2.1% in the fourth quarter of 2022, marking the seventh consecutive quarterly increase. However, despite the continued recovery of the traveling sector, spending was still 16.2% lower than the pre-pandemic levels from the fourth quarter of 2019.
On the other hand, throughout 2022, this gap narrowed sharply as tourism spending increased by 45.1%, driven primarily by a tripling of outlays on passenger air transport compared to the previous year.
Passenger air transport was the most significant contributor to the growth in this spending, with a 4.6% increase in the fourth quarter. Recreation and entertainment also saw a rise of 6.7%, followed by non-traveling products, which rose by 2.0%.
Tourism Gross Domestic Product (GDP) increased by 2.1% in the fourth quarter of 2022, after a 4.5% increase in the previous quarter. The growth was primarily driven by transportation services, which rose by 8.5%.
Overall, tourism GDP was 82.7% of its pre-pandemic level. However, its share of GDP slightly increased to 1.58% in the fourth quarter.
Employment Generated by Tourism
Employment generated by traveling rose by 1.5% in the fourth quarter of 2022, following gains of 3.9% in the previous quarter. The recreation and entertainment industry (+4.9%), food and beverage services (+0.9%), and accommodation (+1.1%) industries were the largest contributors to this growth.
The share of employment in this industry slightly edged up to 3.27%, indicating that the industry is on a path to recovery after being hit hard by the pandemic.
Annually, tourism GDP increased by 43.1%, while jobs attributable to traveling demand rose by 22.1%. These figures suggest that the travel industry is on a positive trajectory towards full recovery.
Tourism Spending by International Visitors
Tourism spending by international visitors rose by 17.5% in the fourth quarter of 2022, following a 15.9% increase in the previous quarter. Accommodation was the largest contributor to the quarter’s growth, rising by 17.8%.
In the fourth quarter of 2022, international visitors accounted for 26.9% of tourism spending in Canada, compared to 23.3% in the previous quarter. However, travel spending by international visitors was still 15.5% lower than pre-pandemic levels. Annually, spending by international visitors increased by 281.0%, representing 21.8% of tourism spending in Canada in 2022.
Tourism Spending in Canada by Canadians
Tourism spending in Canada by Canadians declined by 2.6% in the fourth quarter of 2022, following a 0.8% increase in the previous quarter. Lower outlays on accommodation (-9.3%), non-traveling products (-5.5%), and food and beverage services (-3.7%) all contributed to the decline.
The overall decline coincided with an increase in the number of Canadians traveling abroad. However, annually, traveling spending in Canada by Canadians rose by 23.7%, with passenger air transport (+191.4%) largely contributing to the increase. In 2022, Canadians spent $54.8 billion on tourism in Canada, compared with $44.2 billion in 2021.
Impact of the pandemic on tourism
The COVID-19 pandemic has had a profound impact on the tourism industry, both in Canada and around the world. The pandemic’s economic fallout has been particularly acute in the traveling industry, with businesses and workers experiencing significant losses. Even as the industry recovers, it faces ongoing challenges, including ongoing travel restrictions, health and safety concerns, and shifting consumer preferences.
The fourth quarter of 2022 saw continued growth in the Canadian tourism industry, with increases in spending, GDP, and employment. However, these gains must be considered in the context of the pandemic’s ongoing impact. While travel spending in Canada has increased substantially over the past year, it remains well below pre-pandemic levels. The sector also faces ongoing uncertainty and disruption, particularly as new variants of the virus emerge and governments respond with new travel restrictions.
Despite these challenges, there are reasons for optimism in the Canadian traveling industry. The ongoing recovery suggests that many consumers are eager to travel and spend money on travel products and services. The growth in spending by international visitors is a particularly positive sign, as it indicates that Canada remains an attractive destination for tourists from around the world.
The role of government support
The Canadian government has played an important role in supporting the traveling industry throughout the pandemic. In addition, to direct financial support for businesses and workers, the government has implemented a range of measures to support the industry’s recovery, including investment in marketing and infrastructure.
As the industry continues to recover, government support will likely continue to play an important role. Continued financial assistance may be necessary for some businesses and workers, particularly those that have been particularly hard hit by the pandemic. Additionally, ongoing investments in marketing and infrastructure will be necessary to ensure that Canada remains a competitive and attractive destination for tourists.
Consumer behavior and the future of traveling
The ongoing recovery in the Canadian tourism industry suggests that many consumers remain eager to travel and spend money on tourism products and services. However, the pandemic has also reshaped consumer behavior in significant ways. Many travelers are now more focused on health and safety concerns and may prioritize destinations and products that offer these features.
Additionally, the rise of remote work and increased flexibility in work arrangements may lead to changes in travel patterns, with consumers spending more time in destinations that offer opportunities for both work and leisure.
Overall, the future of the Canadian tourist industry remains uncertain, with ongoing challenges related to the pandemic, shifting consumer preferences, and changing economic conditions. However, the continued growth in spending, GDP, and employment in the industry suggests that there are reasons for optimism. With ongoing government support and continued innovation in products and services, the Canadian tourism industry may continue to recover and thrive in the years ahead.