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Dawit Habtemariam, Skift
April 11th, 2024 at 11:02 AM EDT
Canada’s adapting to changes to its tourism sector and relationship with the Chinese market.
Dawit Habtemariam
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The U.S., Britain, and other Western destinations are still waiting for Chinese group tours to return to their pre-pandemic levels. Canada, however, has been adapting to the continued absence of Chinese groups. The country has sought other sources of tourism growth, such as through its new fund to attract business events and its plans to co-host the 2026 FIFA World Cup.
“There are some geopolitics going on right now that are having an impact on tourism,” said Destination Canada CEO and president Marsha Walden.
Canada last year surpassed its 2019 tourism revenue thanks to visitors from the U.S., Europe, Mexico, and Australia. It accomplished this feat despite disputes between the leaders of Canada and China souring relations. For over three years, China has banned travel agencies from selling group trips to Canada — traditionally a key tourism source.
In a wide-ranging interview, Destination Canada’s Walden spoke with Skift about a new tourism data project launching in May, a new fund to lure business events that the country launched last month, the country’s preparations for hosting the 2026 FIFA World Cup, and more. The interview has been edited for length and clarity.
Skift: What has been the pace of Canada’s post-pandemic international tourism recovery?
Marsha Walden: We’ve already fully recovered in terms of revenue, and we feel really good about that despite some areas of our overall market portfolio that haven’t been performing like they did pre-2019.
China is still missing. There are some geopolitics going on right now that are having an impact on tourism. We don’t have nearly the number of flights that we had from China. We’re currently not on China’s Approved Destination Status (ADS) list.
That’s not to say that Chinese travelers can’t come to Canada. The ADS ban just prevents group travel from being sold into Canada.
But we’re not necessarily seeing that as a huge negative because it aligns more closely with how we see our strategy going forward, really focusing more on FIT [fully independent travelers] guests who not only have the propensity to spend more but who also experience our country in a different way that adds to our new strategy, which is inviting guests that can really contribute to the wealth and wellbeing of Canadians. The group travel business is less of a concern than it was pre-pandemic.
And despite that, we are still at 104% of revenues from 2019. That’s because we’ve had really good performance out of the U.S., Mexico, parts of Europe, and Australia.
Asia generally is taking a little longer to bounce back. Our Japanese and South Korean clients are a little slower to recover as well, but we’re expecting that will turn around in 2024 or 2025.
Canada is co-hosting the 2026 FIFA World Cup with the U.S. and Mexico. A major challenge for the U.S. is getting visa wait times down so fans can attend the tournament. What does Canada need to do to make travel easier for World Cup fans?
We do, of course, have visa wait times, but they’re significantly lower than what the U.S. is experiencing right now. I have a lot of confidence that the government’s going to resolve these things prior to FIFA showing up.
In fact, there are conversations going on between our two nations to streamline how we can make the experience for travelers who are going between countries for games the smoothest it could possibly be.
What role will Destination Canada play in the World Cup?
The thing that I think is marvelous about FIFA is yes, the event draws millions of people to experience a country, but it’s really the other 4 billion eyeballs that you’ve got on your country and the opportunity to showcase the way you live, what it’s like to visit here.
It’s really the legacy impact over the next four to five years that I think is the most powerful part. From a tourism perspective, yes, it gives an initial nice lift and hit, but it’s that legacy that I think is something that we all work toward, is making sure that we’re just showcased in a way that makes Canada incredibly appealing.
LA Tourism CEO Adam Burke told me that Canada is one of the three names that come up repeatedly from his meetings with travel trade partners. What’s Canada doing to get such attention?
Canada’s partners across the country have really been investing in how to attract business events and reignite interest in [conferences] coming to Canada. They’re working together under our common banner too. Everything from being uniformly dressed to bringing a big contingent of cities to these events and having a slightly different strategy, I would say, than most destinations.
Destination Canada focuses on what we call the sixth economic growth sector. We pursue businesses that also have significant economic potential for us as a nation beyond tourism. For instance, life sciences, agrotech [agricultural technology], and other areas where Canada wants to position itself in the greater economy are the areas where we help our industry secure events for the future.
We just launched the International Convention Attraction Fund, and this is an investment by our federal government of 50 million [Canadian dollars] over three years to help secure events that may need an incentive to come to Canada. Our destinations can apply for up to a million dollars to help offset some of the costs of bringing a convention to Canada.
Is this to help offset the slow recovery of business travel? During its lockdown, Canada lost some conventions and events to other destinations.
Every extra month of delay costs the industry some business. We did see a tremendous surge in re-bookings in the first two years of opening our borders once again. But we’re now at about below 80% of where we were in terms of overall delegates [attendees], and we don’t expect to fully recover for another couple of years, probably 2025.
However, I think there are lots of things that we’re doing to help position ourselves and to become more competitive. One of which is we have 20 of our cities now participating in measuring their sustainability of events. We can offer events that are more attractive to corporate event producers on a sustainable basis and fully measure the impact of their event.
Has there been a general rise in interest from international tourists to experience Canada’s celestial events?
Absolutely. There’s been tremendous interest in our Northern Lights product. In fact, a number of operators have said, look, we’re sold out through all of 2024 and 2025.
We also find that it’s a big draw for Japanese and South Korean clients. Last year, we had a big campaign around our Northern Lights. We did a takeover in Times Square of all the outdoor formats available there.
Another popular niche product is “dark skies,” which are settings where there’s no light pollution and you get the full impact of the galaxy. We have dark sky preserves, many of which are in the northern parts of our provinces.
Last year, the Tourism Industry Association of Canada found more than half of Canada’s small-and-medium-sized businesses were struggling to pay back their loans to the government, causing a potential wave of shutdowns. Isn’t this a cause for concern?
The recovery has been uneven across the country. The government made significant investments to keep businesses alive. More than 80% of all loans offered by the government are now being repaid.
But for the 20% that were really impacted, those are the ones that are struggling to repay it and looking for extensions. Those government loans have already been extended twice. And so I think there certainly is concern.
There were about 1.5% fewer tourism businesses in Canada in 2023 than in 2019, which speaks to the impact.
Normally, you’d see business growth. It is of concern, but is it devastating for our industry? No, we have a very healthy and vibrant industry.
But we are going through a period of turnover and change as some people just can’t survive carrying the debt load they had to take on to make it through the pandemic.
A long-term challenge for Canada emphasized in Destination Canada’s industry report last year was not having the capacity to meet travel demand. With these businesses gone, this will make it even more difficult to deal with this challenge.
Of course it does. That’s why we’re trying to shift our marketing emphasis to ensure that people know that fall and winter are fantastic times to come to Canada as well. It doesn’t have to be all about summer, but we’re working as part of our strategy that we’re about to launch our 2030 strategy in May.
We’re working with our “North Star partners,” which include all the provinces and territories and major cities and resorts across the province, to really define strategies that will help us attract investment and help us create the return on investment that businesses are seeking to bring their money to Canada.
What’s your new data project?
We’re about to launch our Canadian tourism data collective, something we’ve been working on for a couple of years. Parts of it will go public in mid-May.
It’s a significant new intelligence platform that brings together statistics from Canada’s national stats agency, Parks Canada, and the private sector to give the most robust view of Canadian tourism that we’ve ever had, both on the demand side, so customer profiles, revenue visitation, all that typical stuff, occupancy. What’s the intensity of tourism in different locations? Where are the investment opportunities?
It will also help governments at every level make good decisions about the value of tourism in their community because this goes down to a granularity that we’ve never had before. Every community can be looked at — I think it’s 4,000 communities or something in Canada.
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Dawit Habtemariam, Skift
April 11th, 2024 at 11:02 AM EDT
Tags: business events, business travel, canada, ceo interviews, china, corporate travel, international tourism, meetings and events, tourism, travel leaders
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