One Year Into the Pandemic: Three Canadian Travel & Tourism Experts Offer Predictions

March 15, 2021 Jim Byers

It was a year ago this month that the travel world ground to a screeching halt. Not many people expected we’d be in the same position 12 months later, but here we are. There are signs of improvement in some parts of the world, notably Asia, Australia and New Zealand and the United States. Greece is talking about opening to tourists on May 14. Proposals for vaccine passports have some countries whistling an optimistic tune.

But there are some major issues still. New COVID-19 variants are wreaking havoc in Brazil and, to some extent, here in Canada. Vaccines are rolling out in some countries, but Canada is still painfully slow. And some countries have just started their inoculations.

We caught up three experts from different areas of the Canadian travel and tourism world to see what they think the future might hold. Here are some thoughts from a top hotel executive, an experienced travel consultant, and the new head of the Tourism Industry Association of Canada. We hope you find their points of view interesting and informative.

Beata Cieplik, Regional Vice President Canada, Marketing Commercial & Revenue Management at InterContinental Hotels Group (IHG)

1. What are the major trends you see in the new era of post-pandemic travel. What makes you pick those trends?

With more than 80% of international flights are still facing some form of restriction. Staycations and domestic leisure trips have been fuelling returning demand in many markets. However, it’s not a linear process, because as we see progress in one location, another market is often taking a step back due to cases rising or lockdowns being reinstated. That said, RevPAR (revenue per available room, a revenue measurement tool hotels use) declines across our markets are improving each month and occupancy is slowly increasing.

At the centre of that improvement is domestic mainstream travel, which is coming back first around the world, as has been the case in previous downturns. Drive-to destinations are in demand as consumers seek the assurance of trusted brands offering accessible accommodation, booking flexibility and consistently high safety standards. At IHG, we’re well placed to capitalize on this, with around 70% of our open rooms in mainstream, belonging to brands including our world-famous Holiday Inn family. In many markets, we are also less exposed than our peers to harder hit areas of demand. This includes large group meetings and events, as well as business that relies on international inbound demand, with 95% of our business in the US domestic driven, for example.

The strengths of our business model and the speed and effectiveness of our actions when it comes to supporting our guests, hotels and owners is reflected in our performance in 2020, which shows IHG ahead of competitors in key areas such as RevPAR, guest satisfaction and occupancy. It is also reflected in the confidence owners have in their future with us, with IHG signing 263 hotels in the first nine months of 2020 and opening 173 new properties.

2. What’s your best guess on when we might get back to half of the travel levels of 2019, and how long until we get to a full 2019 level of travel?

In terms of business travel, it will take time, but I fundamentally believe business travel will come back. We released some research recently around the future of travel. A big percentage of people told us that they really miss creating meaningful relationships through travelling for work. We known then they return it will be different, we may not see as many one-day trips for a two-hour meeting, but there’ll be new sources of demand, i.e., people blending business and leisure travel; more company events bringing colleagues together as work shifts from offices to flexible arrangements; travelling into cities to work. 

With domestic business travel, we’ve really leaned into industries where travel is critical to the recovery e.g. transportation; construction / infrastructure projects; health / pharma and government; companies that provide workforce lodging. International travel will take the longest to rebound, we except leisure to come back first, and then business travel.

With regards to large groups this will be the segment that will be the last to recover. It will take time for people to be comfortable with large in-person gatherings; people will feel safer once a vaccine is widely distributed. We feel encouraged with the distribution of the vaccine starting across Canada, and more widely across the US.

3. How do you think big city hotels in Canada will fare in the next year? Will they have to reduce prices or bring in special programs and packages to get customers?

The impact of this crisis on our travel and hospitality industry cannot be underestimated, but we passionately believe it will recover in time. People will always want to explore the world, relax or reconnect with friends and family, the wheels of business must turn, and events still need to be run.

In Canada, we have introduced rates such as Book Now, Play Later which allows greater flexibility to our guests. With this rate there is with no deposit required and full cancellations up to three days before your stay, travel planning is commitment-free.

Right now, our hotels across Canada are creating day itineraries to support their domestic travel guest. This includes working with local attractions to develop unique packages for drive markets. This includes ‘big city’ hotels in Toronto and Montreal, these properties continue to be creative in arranging experiences for guests, such as room-service packages for Valentine’s Day or stay local packages for the upcoming April Spring break, thus allowing families and couples to travel in a safe manner.  

Greg Klassen, principal, Twenty31 Consulting

1. What are the major trends you see in the new era of post-pandemic travel. What makes you pick those trends?

There are so many unknowns for a post pandemic tourism industry.  Twenty31 has developed a list of 21 tourism trends for 2021 for TIAC in our February edition of the State of Tourism During Covid.

If I were to choose those trends that may most likely have the staying power, in addition to those that are clearly taking place right now…local and rural tourism, I would suggest the following:

1. Work from Anywhere. This was a burgeoning trend prior to COVID as technology allowed us to cut the shackles to the office desk and effectively work from wherever we happened to be. During COVID-19 lockdown, we have proven we can effectively do our jobs from home, so post COVID, these digital nomads will continue to work remotely but for some, remote may mean in Costa Rica or Collingwood, Nova Scotia or Portugal for a month or two as we consider combining work with vacation and truly experience a destination as a local.  Keep an eye out for destinations developing strategies to attract temporary residents like Hacker Paradise, which pulls trips together for remote workers.
2. Travel with Intention. We have learned a lot during COVID about our values and our impact. Our pause has given a new meaning to our impact on travel and tourism. Our skies are clearer.  Tourism may not look a lot like it did in the heady days prior to 2019, but post COVID it may look like fewer but longer trips, possibly combined with “work from anywhere” to stay longer—and a slower travel experience to take the time to really learn and understand the destinations that we are visiting. And finally, spending our tourism dollars in destinations that better align with our values.  
3. A focus on hygiene.  We will be seeking experiences, accommodations and even destinations that can certify they are hygienic or at the very least following some hygiene protocols. Look for destinations certifying (through EarthCheck or other certification programs) that they are following rigid protocols to differentiate themselves from other destinations. 

2. What’s your best guess on when we might get back to half of the travel levels of 2019, and how long until we get to a full 2019 level of travel?

There have been a number of predications of “travel revenge.” Consumers anxious to travel as soon as they can to make up for those times in quarantine. This week, with Spring Break in full swing, the US has experienced a record number of passengers at airports across the US heading to ski and beach destinations. Across Canada, cottage rentals, resorts and camp sites are sold out for the summer. 

But for international travel to Canada, I predict that government will take a cautious approach to re-open borders, which will delay any international travel. That pent-up demand to travel internationally will likely bypass Canada in favour of destinations more likely to open earlier, like the US and some parts of Europe. Greece and Portugal have already communicated their return to international tourism protocols which includes proof of vaccinations and testing. I think these ever-popular destinations will, as a result, see quick returns to international visitors. 

But with Canada’s cautious approach, we will miss out on this first round of pent-up deman. We will more likely see a rise in 2022 to more than half the levels of 2019 but with more accelerated growth in 2023 and 2024 where tourism will return to full travel.

3. The competition will be fierce for a limited number of travellers this year and probably next. What should Canada or Canadian destinations do to make themselves stand out?

Competition will indeed be fierce. Currently less than 35% of the world’s prospective travellers are even considering a trip in the next six months. At the same time, we will see destinations ramping up their marketing efforts, opening up borders, and significantly reducing restrictions on travel, in particular those which have done a good job quickly vaccinating their citizens. In fact, those that have the highest vaccination rates, Israel, UK and the US will see the fastest return to international tourism.  But what can Canada do to stand out?

First, Canada must accelerate the pre-conditions for a return to international tourism as many other countries have done. This would include accelerating vaccinations, significantly easing restrictions to travelling across borders, agreeing on protocols for COVID pre-testing and/ or on arrival, eliminating or significantly shortening a quarantine periods and easing restrictions for intra-provincial travel. 

Once this is done, then Canada must identify the source markets that have the highest likelihood to return to tourism themselves. This will be determined by previous propensity for travel to Canada, and their own rates of vaccination. Canada will be in a more favourable situation as the two highest source markets for Canada are the US and UK which have some of the highest vaccination rates in the world.  Concentrating marketing efforts to these two countries and any similar countries will be important for faster recovery.  Finally, Canada’s brand and reputation with strong governance, health care and relative effectiveness of managing COVID will hold Canada in good standing as discerning and less secure travellers may seek a more cautious approach to travel, including rural and wide open spaces in the coming year

4. How do you think big cities and big city hotels in Canada will fare in the next year?

Larger cities in Canada will fare poorly this year with potential for recovery later in 2022.  That is especially those cities that have built their hotel and tourism assets (and prices) on business meetings and conventions. 

Cities, now in direct competition with rural and resort destinations, will have to (temporarily) reposition themselves as leisure destinations with an abundance of parks and trails over vibrancy and hustle and bustle and centres of commerce. However, later in 2022, with COVID in our rear-view mirrors, travellers will be seeking the excitement of the city experience again. 

Beth Potter, President CEO, Tourism Industry Association of Canada

1. What are the major trends you see in the new era of post-pandemic travel. What makes you pick those trends?

• Seamless travel experience with the use of biometrics… from checking in for flight to borders control and eventually to suppliers like hotels.

• Travellers will have control of their data and who in their journey has access to it.

• TIAC is supportive of this type of innovation. It should help lower the cost of travel, increase the speed of visa applications and move visitors quickly and efficiently, all while protecting Canadians.

• The pandemic has accelerated the implementation of seamless travel in many global destinations. It may not be a trend but it’s important that Canada is part of this solution.

2. What’s your best guess on when we might get back to half of the travel levels of 2019, and how long until we get to a full 2019 level of travel?

• Destination Canada research is clear that if Canadian borders don’t open by October 2021, recovery to 2019 levels is not expected until 2026.

• Recovery could also be hampered by chronic labour shortages in the sector.

• TIAC is calling on the government now to provide a blueprint and conditions that are required before provincial/ territorial and international borders can reopen (i.e. one set of travel policies within Canada), to rethink quarantine rules and to embrace innovation and new solutions for testing travellers before or after their journeys.

• The government will need to provide targeted funding for labour market research and skill and capacity building programs that prioritize jobs in the tourism economy and ensure all immigration programs meet future tourism labour demands.

3. The competition will be fierce for a limited number of travellers this year and probably next. What should Canada or Canadian destinations do to make themselves stand out?

• TIAC is pushing the government to introduce a tax incentive to Canadians for the 2021/2022 tax years to travel locally or within Canada.
• Canadians normally spend more on travel abroad ($40B) than international travellers spend in Canada ($23B). With the lack of travel in 2020, there is an opportunity to inject some of this spending into Canada. Converting just 10-12% of these Canadian expenditures could net an additional $4-5 billion. Canada needs to support stakeholders to market domestic and local tourism options, keeping in mind that domestic travel is a key first step, but will not bring the industry back to full scale. For that, we need international revenue.

4. How do you think big cities and big city hotels in Canada will fare in the next year?

• Urban centres across the country have been disproportionately impacted by the pandemic. Specifically, those dependant on business meeting and events, after years of investments in building and upgrading convention centres, with no expected revenues in the near future. TIAC is calling on the government to develop a Business Events and Urban Recovery funding program to support Destinations in replacing business and securing new future opportunities.
• We are also asking for the re-introduction of the federally funded Marquee Tourism Events Program to support key festivals and events across Canada and for reinstatement of the visitor GST rebate program for international visitors.
• All of these measures will be vitally important to support hotels and our urban centres.

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