Business Travel Recovery Outlook Positive

 

Leisure travel comprised the main driver of travel over the past two years, hitting pre-pandemic levels in 2022 with $72.4 billion in revenue, according Destination Canada. Corporate travel is finally starting to pick up too — a critical factor in filling hotels, restaurants and conference centres outside of peak months in the summer and winter holidays.

Total spending by business travellers will recover to $14.4 billion in 2024, reaching 102 per cent of 2019 levels, but will still lag behind leisure spending.

Destination Canada’s latest, Tourism Outlook: Unlocking Opportunities for the Sector, shows total tourism revenue is set to exceed 2019 levels, generating $109.5 billion by the end of 2023. This represents the recovery of the tourism sector from the COVID-19 pandemic, one year earlier than projected. Despite tourism coming to a standstill in 2020, the industry, post recovery, is expected to grow faster than the general economy at 5.8 per cent, reflecting its resilience and importance to the economic vitality of the country.

Overall, the number of guests on business trips to Canada from domestic and international origins will reach pre-pandemic levels in 2026. Business events travel, which includes corporate meetings and association conferences or incentives, will recover by 2028.

However, while business transient trips of domestic origin will recover by 2024, transient trips of international origin will take longer to recover, stretching into 2030. Business transient trips includes business development, sales and service calls.

Canada’s pipeline of leads for business events is expected to recover by 2024, but the resulting bookings will not gain traction until 2028. These leads indicate current opportunities on an active bid for a conference or event that is pending a decision on its location. While lead activity is high and improving, bookings remain well below pre-pandemic levels. Lead generation should reach pre-COVID levels starting in 2024. The resulting bookings will lead to a full recovery of business event bookings over the next three years, by 2028. This trend is impacting global business events and is not unique to Canada.

Key Report Highlights:

  1. Tourism revenue will exceed pre-pandemic levels in 2023: Amid inflationary headwinds, tourism spending will exceed pre-COVID-19 levels in 2023, reaching $109.5 billion. Domestic activity has led revenue recovery and is on track to reach 104 per cent of 2019 levels by the end of 2023.
  2. Opportunities constrained by capacity​: As we look to 2024 and beyond, opportunities for growth prevail but challenges persist as we enter a fiercely competitive global marketplace where we are all vying to attract travellers. ​Demand for travel is projected to grow by 30 per cent by 2030 and will outpace our capacity to host in peak seasons, limiting Canada’s growth potential.
  3. $160 billion Potential: The report identifies a $160 billion revenue potential for the tourism industry by 2030, but only if a transformational path is taken that addresses constraints and shifts demand to change how growth occurs.
  4. Closing the $20 billion opportunity gap: Destination Canada proposes a transformative path to secure an additional $20 billion in annual revenue by 2030, driving real prosperity for tourism businesses across the country and contributing a 14 per cent increase in GDP generated by tourism, 84,000 more jobs and $5.3 billion more in tax revenue for all levels of Government.
  5. Transformational path: Industry transformation will close the $20 billion opportunity gap but it will require sector-wide collaboration on seven key levers: revenue and yield growth, brand leadership, investment, access, workforce and digital readiness, environmental sustainability and support from Canadians.

Download the full report here.

 

 

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