Tourism and the Last Two Years

Every two years, the Canadian Tourism Human Resource Council (CTHRC) conducts an in-depth labour study that looks at how Canada’s tourism sector will be affected by current labour conditions and the existing economic environment. The first in a series of reports, The Future of Canada’s Tourism Sector was released in June 2008. At that time, the tourism sector faced a worker shortage equal to 24,000 unfilled tourism jobs. In October of 2008, the number of people employed in Canada reached a record high of 17,215,800 and the unemployment rate stood at 6.2%.1 However, that was before the effects of the subprime mortgage crisis drove much of the world into recession. From October 2008 through August 2009, the number of jobs in Canada dropped by 414,000 and the unemployment rate rose to 8.7%.2 It was in the latter half of 2009, as the Canadian economy was beginning to recover, that the most recent tourism labour study was conducted. It found that the number of surplus workers available to the tourism industry could fill 34,000 jobs. However, it was expected that as the economy recovered, job creation would reduce that surplus. Based on current trends, it was predicted that by 2012 tourism jobs would once again be going unfilled due to a lack of workers. The full report, The Future of Canada’s Tourism Sector: Economic Recession only a Temporary Reprieve from Labour Shortages, is available as a free download on the CTHRC website.

Since August of 2009, 563,900 jobs have been created in Canada although unemployment is still above its pre-recession level. Tourism has recovered as well; the number of jobs in tourism fell 0.6% in 2009 but rebounded by 1.0% in 2010.  This is good news, yet a great deal of uncertainty about the future remains. Canada has seen relative economic stability which should create continued growth in domestic tourism and spending by local residents. The agreement with China on Approved Destination Status, which allows Canadian tourism agencies to market directly to Chinese consumers, also bodes well for growth in that market. The outlook for other international tourism markets is more problematic. Financial instability in Europe and the United States has negatively affected travel to Canada, and the number of visitors from those markets has been further hampered by a rising Canadian dollar. In August of 2009, the Canadian dollar stood at $0.85 per US dollar but now stands at $1.01, making travel to Canada more costly and decreasing the country’s appeal as a tourism destination.

The interaction of two trends allows for the prediction of labour shortages and surpluses; economic trends, which have seen significant volatility and demographics, which are more stable. In Canada, labour force growth is expected to slow as the baby boomers retire. The labour force is also expected to become older. The percentage of the labour force over the age of 55 increased from 10% in 2001 to 17% in 2009 and could reach 24% by 2021.3  As they exit the workforce, retired baby boomers will continue to create demand for tourism products. They will travel within the country, make use of entertainment facilities, and eat at local restaurants. While there may be a shift towards seniors working past 65, this may be irrelevant for tourism if the sector continues to rely heavily upon young workers to fill front-line jobs.

It is the convergence of increased tourism demand and slowing labour growth that creates shortages.  Continued growth of demand for tourism products has the potential to create tourism jobs at a compound annual growth rate of 1.9% per annum between 2011 and 2015. That is, if employees can be found to fill them; demographic projections suggest that supply will fall short of demand.

To ensure it has the most up-to-date information, the CTHRC continues to update its outlook on current and future tourism labour conditions. In order to provide input, tourism operators can participate in this year’s Tourism Outlook and Labour Issues Survey. The survey will take about five minutes. To take the survey, click on this link. Twelve regional focus groups will also be conducted this November. If you would be interested in participating in one of these focus groups please email Calum MacDonald at cmacdonald@cthrc.ca

1 Statistics Canada. 2008-11-07, Labour Force Survey. 71-001-X, October 12 – 18, 2008.
http://www.statcan.gc.ca/daily-quotidien/081107/dq081107a-eng.htm
2 Statistics Canada. 2009-09-04, Labour Force Survey. 71-001-X, August 9 – 15, 2009.
http://www.statcan.gc.ca/daily-quotidien/090904/dq090904a-eng.htm
3 Statistics Canada. 2011 Canadian Economic Observer: Projected trends to 2031 in the Canadian Labour Force., 11-010-XIB, Vol. 20, no. 6, 3.1