Tourism Employment Rebound Slows in July

Tourism employment increased in July, albeit at a slower pace than in June. Employment increased in four of five tourism industry groups but declined in the transportation industry.

  • Tourism employment increased by 190,000 jobs between June and July, an increase of 12.8%, lower than the 19.7% growth in employment that occurred between May and June.
  • The tourism unemployment rate has fallen to 18.7%.
  • Increases in tourism employment accounted for 65.1% of all employment increases in July.
  • There were 557,200 fewer individuals employed in tourism in July 2020 than in July 2019
  • Employment in occupations with lower average annual earnings was more strongly affected than in occupations where average earnings are higher.

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.

In the tourism sector, the seasonally unadjusted labour force survey data shows that the number of employed individuals grew by 190,000—an increase of 12.8%, following a 19.7% increase in June. Combined with the increases in May and in June, tourism employment has risen by 517,800 jobs since April. However, employment in tourism remained 17.9% below February levels and 25.0% lower than in July 2019.

Last July, there were over 2.2 million Canadians working in the tourism sector. This July, that number dropped to just over 1.67 million Canadians.

In July, employment (unadjusted for seasonality) across the entire Canadian economy increased by 291,800 jobs. The increase in tourism employment accounted for 65.1% of that overall increase.

From June to July, employment changes by industry group ranged from a loss of 10,100 jobs in transportation to the addition of 110,200 jobs in food and beverage services. As a percentage, the recreation and entertainment industry had the strongest growth, increasing 19.5% relative to June.

Of the added employment, 43.9% were full-time jobs. In the recreation and entertainment and the travel services industries, the growth in full-time jobs was greater than the growth in part-time jobs. In transportation, both full-time and part-time employment decreased.

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 is doing. It also helps illustrate the size of the employment increases, relative to the employment decreases that occurred in past months.

Employment in all industry groups remains below pre-COVID levels. The recreation and entertainment industry has made up most of March and April’s jobs losses, as employment in that industry is only 3.5% below February levels. The travel services industry has the largest overall employment loss as a percentage of the number of individuals employed in February, down by 38.7%, followed by the transportation industry, which following an employment loss in July has employment levels 30.6% lower than February.

July and August are a peak time in demand and employment for Canada’s tourism sector. Therefore, it is important to compare year-over-year employment, as March is usually a low point for tourism employment, after which jobs are steadily added until an August peak. Under normal circumstances, tourism employment drops again as the summer tourism season ends.

On a year-over-year basis, seasonally unadjusted employment across all Canadian industries was down 6.3% from July 2019. In comparison, tourism employment was down 25.0%. By industry group, year-over-year employment losses in July ranged from 37.9% in transportation to 20.9% in food and beverage services.

In July, tourism employment increased in all provinces. Employment increases ranged from an additional 1,200 jobs added in Prince Edward Island (an increase of 21.1% from June) to an additional 57,800 jobs in Ontario (an increase of 16.9% from a month prior).

Tourism employment in New Brunswick and Newfoundland and Labrador has essentially recovered to pre-COVID levels, while Prince Edward Island had slightly higher employment in July than in February. However, on a year-over-year basis, employment in all provinces remains well below last summer’s levels. New Brunswick’s tourism sector is the closest to normal employment levels, being “only” 12.4% below the level of employment for July 2019. Prince Edward Island, Ontario, and Saskatchewan are the farthest from last year’s July employment levels, at -38.4%, -35.2% and -34.8%, respectively.

The overall and tourism unemployment rates decreased in July. Tourism unemployment fell to 18.7%. By tourism industry group, the unemployment rate was highest in travel services, at 27.2%.

In July 2020, the unemployment rate was 14.0 percentage points higher than the rate reported in July 2019, and lower than the previous month (June 2020) when the unemployment rate stood at 25.0%. At 18.7%, tourism’s unemployment rate was above Canada’s seasonally unadjusted unemployment rate of 11.2%.

The unemployment rate dropped in four of the five industry groups that make up the tourism sector, while it rose in the transportation industry.

Unemployment Rate
Tourism Industry Group[1]

July 2019

June 2020

July 2020

Tourism 4.7% 25.0% 18.7%
Accommodations 3.4% 30.3% 25.7%
Food & Beverage Services 5.9% 25.8% 17.0%
Recreation & Entertainment 5.0% 27.8% 20.6%
Transportation 2.9% 14.3% 14.6%
Travel Services N/A 28.1% 27.2%

On a provincial basis, tourism unemployment rates ranged from 10.8% in Saskatchewan to 21.6% in Ontario.

The seasonally unadjusted unemployment rates for tourism in each province were above the rates reported for the provincial economy.

Total Actual Hours Worked by Sector

In July, the number of actual hours worked decreased in many sectors, likely due to summer vacations. The number of actual hours worked in tourism-related sectors continued to increase, although not as rapidly as in May and June. In July, the number of actual hours worked increased by 16.8% in the accommodation and food services sector, and by 11.9% in the information, culture and recreation sector.

Back in February, accommodation and food services employees worked over 31 million hours, but this July actual hours worked only totalled 23.6 million hours. Workers in the information, culture and recreation sector worked 22.3 million hours in February. By April, actual hours of work had dropped to 13.6 million hours, but this rebounded to 20.9 million hours in July.

The reduction in hours worked in these two sectors continues to be greater than the reduction in employment. This suggests that there are still individuals employed but not working to full capacity.

Employment by Occupation and Average Annual Earnings

The following chart groups occupations by the average annual earnings of those working in the occupational group. Occupations are grouped into those earning less than $30,000; $30,000 to $50,000; $50,000 to $80,000; and over $80,000.

Initial employment losses (March and April) were heavily concentrated in occupations where workers earn less than $50,000 a year on average. By April, employment dropped by 992,000 jobs in occupations that earn less than $30,000 per year, and by over 1.2 million in occupations earning between $30,000 and $50,000. The two highest earning categories lost a total of 707,600 between them.

While initial employment losses were mostly in lower-earning occupations, those occupations have seen a greater recovery as well. In July, the number of individuals employed in occupations earning less than $30K were 376,700 fewer than in February, followed by occupations in the $50K to $80K range (-283,300), and $30K to $50K (-249,900). The number of employed individuals working in occupations with average annual earnings above $80K was 62,300 higher than in February.

Still, as of July, the two lowest earning categories made up almost three quarters of employment losses since February, and jobs within these earnings categories are most at risk should employment decline in the fall due to slowing demand or a resurgence of COVID-19.

The Fall 2020 Outlook

Employment has increased significantly as restrictions on businesses have lifted. A further employment increase in August is expected, but growth is then likely to slow. The normal yearly trend is for tourism employment to decline between the 3rd and 4th quarters of the year. While the overall tourism employment decline is not large in percentage terms—averaging -5.9% over the last decade—the trend is much more noticeable in certain industries, such as accommodation, and in provinces such as Prince Edward Island, where the seasonal drop in tourism employment from Q3 to Q4 averaged -29.3% over the past decade.

As of the release of this report, the Canadian border will remain closed until at least September 21, but it is unlikely to open until much later in the year or even not before 2021. Any employment growth this autumn will need to be driven by demand from locals and Canadians travelling within the country. With the border closed, domestic tourism demand could increase because Canadians who would normally travel to another country may choose to travel within this country between September and December.

The tourism sector is facing very significant headwinds, yet the sector remains innovative and resilient. One current example: although patio dining usually becomes less appealing in cold weather, restaurants are making investments in heat lamps to extend the outdoor dining season. The tourism sector as a whole will need to muster all of its innovation and resiliency—and will require the support of Canadians—if it is to continue to recover this fall.

[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.

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