· Tourism

Capturing the Full Picture as Tourism Unemployment Spikes

The restrictions on international, domestic, and local travel are having a severe negative impact on Canadian tourism businesses and workers. Leading indicators of traveller volume show that the number of international visitors to Canada arriving by air fell 61% in March 2020 compared to March 2019 and the number of Americans crossing into Canada at land borders fell 60%.1

In addition to essentially non-existent tourism, the global event dubbed “the Great Lockdown” by the International Monetary Fund has shuttered many tourism businesses and severely limited local demand for those that remain open. Weekly surveys of tourism businesses by industry associations across Canada have shown that up to half of their members are closed, while seasonal businesses have delayed opening. Many have laid off a large percentage of their staff, and their responses suggest that the effect of COVID-19 is running ahead of the ability of official statistics to track unemployment.

The data in the most recent Labour Force Survey (LFS) was collected the week of March 15 to 21. That week, most provinces were in the process of restricting the types of businesses—such as dine-in restaurants—that could be open. Although restrictions such as limiting restaurant capacity to 50% had been put in place earlier by some municipalities, LFS data collected that week would only have captured some of the impact, as a full lockdown across the entire country was not yet in place.

Despite this, the March data offers insights into how large the effect on the tourism sector will become in the months ahead.

Tourism Employment

There were over one million fewer Canadians employed in March than there were just one month prior. The seasonally adjusted unemployment rate jumped 2.2 percentage points to 7.8%. However, these topline numbers are only part of the story as it pertains to the tourism sector.

Tourism HR Canada’s customized Labour Force Survey data shows the full impact on the tourism sector, relative to the overall economy. To do this, we rely on seasonally unadjusted data. The remainder of this article uses this seasonally unadjusted data and therefore some data points may differ from those reported elsewhere. For example, while the seasonally adjusted unemployment rate for March was 7.8%, the unadjusted unemployment rate was 8.4%.

Using this data, the number of employed Canadians dropped by 1,060,500 individuals from February to March. Almost half of that decrease (448,600) was in the tourism sector. There were 167,100 fewer full-time and 281,400 fewer part-time workers employed in tourism-related jobs. These represent drops of -13.9% in full-time tourism employment and -33.7% in part-time.

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