After two months in which tourism employment decreased 43.3%, May saw a reversal, driven by increases in the accommodations, food and beverage services, and recreation and entertainment industries.
Data for the May Labour Force Survey was collected the week of May 10th to 16th, when many provinces were easing restrictions, although most remained in place in Alberta, Ontario, and Nova Scotia.
Employment in the tourism sector increased by 83,900 jobs, following the massive employment loss of 881,700 jobs in March and April. Despite the increase, the number of individuals employed in tourism was 39.2% lower than in February 2020, and 41.2% lower than in May 2019. There were 868,400 fewer people employed in tourism this May than there were one year prior.
Please note: To allow comparisons with tourism sector data, which sees significant employment fluctuations over the year, we use seasonally unadjusted data for both tourism employment and overall employment. This May, there was a large gap between the seasonally adjusted and seasonally unadjusted increase in employment (290,000 and 620,500, respectively).
In May, overall employment (unadjusted for seasonality), increased by 620,500. The increase in tourism employment accounted for 13.5% of that increase. This is in contrast to the employment decreases that occurred in March and April, when tourism accounted for 30.3% of employment decreases.
By industry group, the news was mixed. From April to May, employment increased in accommodations (14,100), food and beverage services (52,300), and recreation and entertainment (35,700). However, employment losses continued in transportation (-9,500) and travel services (-8,700).
In the accommodations and recreation and entertainemnt industry groups, employment increases were almost exclusively driven by full-time jobs. In food and beverage services, 62.9% of added jobs were part-time. Overall, 64.6% of the increase in employment was in full-time work.
Among the two industries that saw continued employment losses, 68.7% of the decrease in employment occurred in full-time positions.
Because the industry groups that make up tourism are different sizes, looking at the monthly change in employment as a percentage change relative to the previous month provides a more equitable picture of how each industry has been affected. It also helps illustrate the size of the employment increases, relative to the employment decreases that occurred previously.
With the addition of May’s employment losses, the travel services industry group has the largest overall employment loss as a percent of the number of individuals employed in February. Despite an increase in employment of 11.0% between April and May, the food and beverage services industry has the second largest overall employment loss since February (-45.2%). The accommodations, recreation and entertainment, and transportation industry groups have all lost around 32% of employment since February.
In May, tourism employment increased in all provinces except for Saskatchewan, which recorded a decrease. That decrease was driven by continued employment losses in the recreation and entertainment, transportation, and travel services industry groups, which were not offset by employment gains in accommodations and food and beverage services.
Generally, as the summer tourism season begins and hiring ramps up, significant increases in tourism employment are not uncommon in May. From 2015 to 2019, the average May increase in employment has ranged from 2.5% in British Columbia to 20.6% in Prince Edward Island. In part, this reflects differences in the seasonality of tourism by province. British Columbia has a strong winter tourism industry that keeps employment levels high year-round. This year, the closure and subsequent reopening of tourism businesses led to a jump in May employment. In Prince Edward Island, where the tourism sector is highly reliant on the summer season, the usual jump in May employment was constricted by COVID-19.
Regardless, these provincial increases in employment follow two months of massive employment losses. While the employment increases are good news, they represent a fraction of the usual provincial May employment levels.
Tourism Unemployment Rate
Despite increases in employment, the unemployment rate continued to grow, albeit more slowly than during the past two months. Tourism unemployment reached 29.7%, and by industry was highest in food and beverage services at 35.0%. Increases in unemployment were likely driven by a combination of individuals who had lost jobs starting to seek new work as some restrictions were lifted and students starting to seek summer work.
The unemployment rate was 24.3 percentage points higher than the rate reported in May 2019, and higher than the previous month (April 2020), when the unemployment rate stood at 28.8%. Tourism’s unemployment rate was well above Canada’s seasonally unadjusted unemployment rate of 13.8%.
All tourism industry groups reported higher unemployment rates than the same month last year. Compared to the massive jumps in the unemployment rate seen over the previous two months, the unemployment rate was relatively stable. The rate decreased slightly in the accommodations and transportation industry groups, but edged higher in food and beverage services and recreation and entertainment industry groups. The largest increase in unemployment occurred in the travel services industry, where unemployment rose by 7.3 percentage points.
| Tourism Industry Group1 | Unemployment Rate – May 2019 |
Unemployment Rate – April 2020 |
Unemployment Rate – May 2020 |
|---|---|---|---|
| Tourism | 5.4% | 28.8% | 29.7% |
| Accommodations | 5.7% | 35.5% | 34.1% |
| Food & Beverage Services | 5.1% | 34.3% | 35.0% |
| Recreation & Entertainment | 8.7% | 28.0% | 29.2% |
| Transportation | 1.9% | 14.8% | 13.2% |
| Travel Services | 2.7% | 22.3% | 29.6% |
On a provincial basis, tourism unemployment rates ranged from 21.0% in Nova Scotia to 42.9% in Prince Edward Island. The seasonally unadjusted unemployment rates for tourism in each province were above the rates reported for the provincial economy.
Across the country, the number of individuals employed in tourism fell by 880,000 in March and April, but then rose by 83,900 in May. In comparison, the number of tourism workers reporting that they were unemployed increased by 342,800 in March and April, and then jumped by an additional 55,600 in May. A significant gap remains between the cumulative decrease in employment and the increase in unemployment, showing that despite some restrictions being lifted, many tourism workers are continuing to wait before seeking employment.
Total Actual Hours Worked by Sector
The reduction in hours worked by sector continues to be greater than the reduction in employment, despite increases in both categories. This suggests there is still a large number of employed individuals who are not working to full capacity. As a percentage of February levels, the Accommodation and Food Services sector continues to have the largest decreases in both actual hours worked and employment. Actual hours worked were down 58.1% from February levels, while employment was down 44.1%. The gap between hours worked and employment levels has narrowed since April, as growth in hours worked outstripped employment increases between April and May.
In February, Accommodation and Food Services employees worked over 31 million hours. In April, they worked just over 10.9 million hours, and in May, actual hours worked increased to 13.1 million hours.
Employment by Age Group and Gender
In May, employment rebounded for all age groups. Those 15 to 24 saw the strongest rebound, following the sharpest losses of employment by age group in the previous two months. Overall, employment for 15- to 24-year-olds was down 26.1% since February, the largest percentage decrease in employment amongst age groups.
Employment levels among female workers decreased more than among male workers in March and April. In May, employment for male workers rebounded by 4.9%, while employment for females rebounded 2.7%.
Moving Forward
As we move towards the summer tourism season, we are seeing some recovery from the large employment losses. As provinces continue to lift restrictions, further employment recovery is expected. However, major barriers stand in the way of tourism’s recovery. Restrictions cannot be fully lifted until a vaccine or effective treatment for COVID-19 is found. While this is the case, businesses will need to implement social distancing protocols that will limit the number of customer and guests they can serve at one time. Many businesses are finding innovative avenues to expand the number of customers they can serve, but at the industry level, limits will remain on the revenue tourism businesses earn from locals and tourists.
Canadians are also less likely to travel this summer. The Conference Board of Canada recently released the results of its travel intentions survey. It confirms that overall travel intentions have fallen since last year. The share of respondents planning on taking one or more overnight trips between May and the end of October has fallen from 79.3% in 2019 to 46.4%.
With international borders still largely closed, and 14-day quarantine requirements in place where they are open, there is a risk that international visitation to Canada will be essentially non-existent this summer. But it also means that Canadians who would have travelled outside of Canada will vacation within the country instead. Despite the overall decline in travel intentions, the Conference Board did note a large increase in the number of respondents planning on vacationing within Canada this year.
Canada’s domestic travel market is significant. Approximately 80% of all tourism demand in Canada comes from domestic travel.
However, Canadian travellers spend a significant amount of money on travel abroad. In fact, Canadians spend more abroad than travellers from other countries spend in Canada. With international travel to and from Canada likely curtailed during the key tourism months, once Canadians are able to travel safely, there will be an opportunity to capture domestically some of the money that would have been otherwise spent outside of Canada’s borders.
[1]As defined by the Canadian Tourism Satellite Account. The NAICS industries included in the tourism sector are those that would cease to exist or operate at a significantly reduced level of activity as a direct result of an absence of tourism.