Despite ongoing public health restrictions that limited tourism businesses’ ability to operate, the sector gained employment in May, adding 45,800 workers. Gains in full-time employment were offset to a degree by declines in part-time employment.
The seasonally adjusted Labour Force Survey data for May shows employment across all industries decreased by 68,000. However, the unadjusted data shows an increase in employment of 288,700.
Why the large discrepancy? In most years, employment increases significantly between April and May as seasonal businesses scale up hiring. From 2015 to 2019, the average increase in seasonally unadjusted employment between April and May was 407,800. Last May, seasonally unadjusted employment grew by 634,600 as businesses started to rebound from the initial shutdowns that occurred at the start of the pandemic. Seasonally adjusted employment data takes into account these historical trends, and when that is done, this May’s employment increase is historically small. So small that the seasonally adjusted data interprets it as a loss of employment.
Data is from the week of May 9 to 15, 2021.
Highlights:
- Tourism employment grew by 45,800, an increase of 3.0% from April.
- In May 2021, tourism employed 1,551,900 workers, which is 306,200 more than in May of last year. But compared to the same month pre-pandemic, tourism employment is down 25.8%, with 538,500 fewer workers employed compared to May 2019.
- The largest employment gains occurred in the recreation and entertainment, and food and beverage services industries.
- Tourism employment increased in all provinces, except for Nova Scotia. Employment climbed 13.0% in Prince Edward Island and 7.8% in Saskatchewan. Despite continuing restrictions, Ontario added 23,900 tourism workers.
- Tourism employment amongst youth grew 9.75% in May.
- In May, tourism employment was down 23.4% compared to February 2020. The total actual hours worked by tourism employees was down 26.1%, from 64.0 billion hours to 41.5 billion hours.
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.
Tourism Employment Rate
In April, seasonally unadjusted employment across all industries increased by 288,700. Tourism employment grew by 45,800, an increase of 3.0% from April. This was a relatively small increase in tourism employment for the month of May. Between 2015 and 2019, the average May increase in tourism employment was 95,620. The smaller increase was due to public health restrictions, which affects tourism to a greater degree than most other industries. The tourism sector accounted for 15.8% of employment gains in May. Usually, tourism accounts for about a quarter of employment added in the month of May.
In May 2021, tourism employed 1,551,900 workers, which is 306,200 more than in May of last year. But compared to the same month pre-pandemic, tourism employment is down 25.8%, with 538,500 fewer workers employed compared to May 2019.
Full-time tourism employment increased by 61,300, while the number of part-time tourism positions fell by 15,500. Employment increased in three of the five tourism industry groups, while declining by 6,300 in transportation and by 600 in travel services. The largest employment gains occurred in the recreation and entertainment, and food and beverage services industries, which gained 27,200 and 24,600 employees apiece.
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 recovering. It also helps illustrate the size of the employment increase or decrease, relative to total employment within a given industry group. Tourism employment is now down 23.4% compared to February 2020, the last month before pandemic-related employment losses began.
Change in employment levels in May ranged from a loss of 2.1% in the transportation industry to a gain of 7.6% in the recreation and entertainment industry.
Since the first month prior to the pandemic, employment is down 31.2% in accommodations, 27.1% in travel services, 25.1% in food and beverage services, 21.7% in transportation, and 17.9% in recreation and entertainment.
Although businesses faced significant restrictions due to public health orders associated with the third wave of the pandemic, tourism employment in May was 24.6% higher than it was last year, when businesses were just starting to reopen following the first pandemic-induced shutdown. Compared to May 2019, however, tourism employment was down 25.8%. Compared to 2019, the accommodations industry had the greatest percentage decrease in employment, but employment levels remain depressed in all industry groups.
Provincial Tourism Employment
Tourism employment increased in all provinces, except for Nova Scotia. Employment climbed 13.0% in Prince Edward Island and 7.8% in Saskatchewan. Despite continuing restrictions, Ontario added 23,900 tourism workers.
The fact that tourism employment increased in provinces where restrictions were ongoing—or, in some cases, tightened—indicates that businesses are trying to prepare for the summer months as best they can, and that includes adding staff. Importantly, at the time data was collected, only Saskatchewan had produced an official reopening plan. Since then, several provinces have produced timelines and milestones that will allow business owners to predict when they will reopen. Due to this increased certainty, employment should increase significantly in June—even if restrictions are still in place when data is collected.
In every province except Newfoundland, tourism employment was higher this May than it was in May 2020. Compared to 2019, provincial tourism employment is well below pre-COVID levels, ranging from -6.2% in New Brunswick to -35.2% in Newfoundland and Labrador.
Tourism Unemployment Rate
The seasonally unadjusted tourism unemployment rate decreased from 11.3% to 9.8%. This was the second month in which the unemployment rate dropped. In April, it fell from 13.0% to 11.3%.
May’s decrease will partially be due to the increase in employment. But stakeholders should be aware that Statistics Canada only links unemployed workers to their former industry for one calendar year. After that, they are counted as unclassified. After over a year in which employment has been reduced due to the ongoing pandemic, the tourism unemployment rate—and by extension the unemployment rate for any industry—should be used with caution. The decreasing unemployment rate does not necessarily mean that tourism workers who have been unemployed for over a year have found a new job or dropped out of the labour force.
The number of unemployed workers in the “unclassified” category has increased from 571,800 in March to 777,400 in April, and reached 880,500 this month.
In May 2021, the unemployment rate in the tourism sector was 9.8%, which is 20.0 percentage points lower than the rate reported in May 2020, and lower than the previous month (April 2021), when the unemployment rate stood at 11.3%.
At 9.8%, tourism’s unemployment rate was above Canada’s seasonally unadjusted unemployment rate of 8.4%.
All tourism industry groups have reported lower unemployment rates than the same month last year.
| Unemployment Rate | |||
| Tourism Industry Group[1] |
May 2020 |
April 2021 |
May 2021 |
| Tourism | 29.8% | 11.3% | 9.8% |
| Accommodations | 34.4% | 16.2% | 13.0% |
| Food & Beverage Services | 35.0% | 11.6% | 10.9% |
| Recreation & Entertainment | 29.3% | 13.1% | 12.6% |
| Transportation | 13.3% | 6.7% | 2.7% |
| Travel Services | 30.4% | 7.4% | N/A |
On a provincial basis, tourism unemployment rates ranged from 8.0% in New Brunswick to 17.3% in Prince Edward Island.
The seasonally unadjusted unemployment rates for tourism in each province, with the exceptions of Newfoundland and Labrador, New Brunswick, and Alberta, were above the rates reported for the provincial economy.
The Tourism Labour Force
The tourism labour force grew in May due to the increased number of employed workers. The labour force grew by 24,100, a combination of 45,800 workers gaining employment and the number of unemployed workers falling by 21,700. The tourism labour force is the smallest it has been in decades, with the exception of April 2021, when many individuals lost work and were unable to seek another job while the economy was shut down.
Employment by Sector
As of May, Canada’s tourism sector employed 473,300 fewer people than it had in February 2020. Across all industries, there were only 134,100 fewer people employed this May than there were in February 2020. Employment is in fact higher than it was pre-COVID in nine sectors of the economy.
That said, employment does tend to increase in a number of industries as the summer months approach. However, comparing May 2019 to May 2021 still shows that employment in tourism has decreased more than it has in the overall economy. To help eliminate seasonal swings in employment that can occur between the winter and spring, we can compare May 2019 to May 2021, which shows employment in tourism is down by 538,500, while overall employment is down 459,200. This does suggest that tourism is losing workers to other industries. Compared to May 2019, employment is up in five sectors of the economy. The finance, insurance, real estate, rental and leasing, and professional, scientific and technical services sectors have seen the greatest growth in employment.
The only other possibility is that employment increases in other sectors are being filled purely by former workers from non-tourism sectors or new entrants to the labour force. The reality is that higher employment levels in sectors such as utilities, construction, and finance are being filled by a mix of former workers from tourism, former workers from other sectors, and new entrants.
Hours of Work
Compared to the levels seen prior to the pandemic, total actual hours worked in the tourism sector remain significantly depressed, and to a greater degree than employment. In May, employment was down 23.4% compared to February 2020. The total actual hours worked by tourism employees was down 26.1%, from 64.0 billion hours to 41.5 billion hours. The total number of hours worked in tourism increased between April and May, rising 6.9% from 38.8 billion hours to 41.5 billion hours. Only in the recreation and entertainment industry has employment fallen more than actual hours of work. The travel services industry has the most significant gap in worker activity measures: employment is down 27.1%, but hours worked are down 39.2%.
The decrease in hours suggests that economic activity has fallen to a greater degree than employment data alone would suggest. Several factors could be behind this gap, but it is partially due to programs like the Canadian Emergency Wage Subsidy (CEWS) and other supports. The good news here is that this data suggests that there are underutilized workers still employed within the industry, thanks to supports like CEWS, and businesses are retaining workers—even at a financial loss—so that they have those employees available when demand starts to return. When it does, there is a reservoir of staffing capacity that already exists within the industry that can immediately be deployed.
Demographic Impact
Numerous studies have noticed the negative effect of COVID-19 on employment among women, immigrants, young people, and visible minorities relative to other demographic groups. To a large extent, the industries that have suffered the brunt of COVID-19 have a higher share of workers from these demographic groups than the overall Canadian labour market. Tourism, for example, has a higher percentage of jobs held by women, young people, and immigrants than the workforce as a whole. However, even within the tourism sector, COVID-19’s negative impact on employment has fallen on some demographic groups to a greater degree than others.
Gender
In May, tourism employment increased 2.3% for male tourism workers and 3.8% for female tourism workers. As a percent of pre-pandemic levels, female employment stood at 77.3% of February 2020 levels and male employment stood at 76.0% of February levels. It is too early to make any firm conclusions, but gender employment trends may be similar to last summer. In the early months of the pandemic, female tourism workers were impacted to a greater degree, but over the summer, employment among women rose higher. Last summer’s trend was likely driven by the food and beverage services industry, which is the largest employer within the tourism sector and which employs more females than males. If demand from tourists is limited this summer, those industries which draw on locals for significant revenues will recover earlier than industries that rely more on tourists. The food and beverage services industry relies on locals for 80% of its demand.
However, a countervailing trend could develop if there is significant demand in the recreation and entertainment industry. It also derives significant demand from locals, as opposed to tourists. Although it does not employ as many workers as food and beverage services, it does employ more males than females.
Age
Tourism employs a very high share of young workers compared to the broader economy. The 2016 census showed that people aged 15 to 24 held 12.8% of all jobs in Canada. People in the same age category fill over 30% of jobs in tourism. Young people tend to be a particularly prominent part of the tourism workforce over the summer months. In July 2019, 37.0% of employed tourism workers were youth. Since the pandemic, the share of youth in the tourism workforce has declined. It is still much higher than in the broader economy and still spiked upwards in the summer of 2020—and is starting to increase again this year. However, as a percentage of the employed tourism workforce, it was 4.7 percentage points lower in May 2021 than May 2019.
Tourism employment amongst youth grew 9.75% in May. Employment decreased amongst those aged 25 to 44 and over 65. In terms of pre-pandemic employment levels, youth employment was still lagging, at only 70.5% of where it was in February 2020. All other age categories were also below their pre-pandemic levels of employment, but not to the same degree.
Immigrant Status
Employment levels amongst landed immigrants working in the tourism sector rose 1.3% in May, while employment among non-immigrants increased by 3.7%. This reflects the increased hiring of young workers (see section above), as there is a lower percentage of immigrants among younger workers aged 15-24. Employment levels among immigrants, as a percentage of pre-pandemic (February 2020) employment levels had been declining since February 2021 and only recovered slightly in May. Employment among non-immigrants has been on an upward trend since this January, with only a slight pullback in April.
Region
Compared to the last month before the pandemic, tourism employment remained suppressed in all types of geographic regions. However, some regions have greater swings in seasonal employment, which makes it important to compare employment during the same month in previous years. This shows that as of May, the rural areas and smaller communities that are economically linked with larger urban centres have had the greatest recovery in tourism employment. Rural areas that are close to urban centres are the only region of Canada that has more employed workers than in both February 2020 and May 2019. Relative to February 2020, rural areas also show smaller increases in the number of unemployed workers in their region compared to urban cores and urban fringe areas.
Summer Outlook
Seeing employment gains in May, when most provinces had yet to lift restrictions, or even put forth reopening plans, is hopeful. It shows that even in the face of uncertainty, some tourism businesses were starting to increase staffing levels. A large increase in employment will occur in June because, in some provinces, restrictions will have eased. In others, where restrictions remain in effect, businesses have been given timelines for reopening that they can plan around.
However, in many provinces, a complete lifting of restrictions is not planned until late summer or even September—although there is a possibility that those timelines could be compressed if full vaccination speeds up. Because of this, employment levels in tourism will remain depressed relative to the pre-pandemic era. This will be particularly true for industries that rely more on tourists than locals for revenue.
But even with overall tourism employment lower than in 2019, many tourism businesses are uncertain whether they will be able to find enough workers this summer. Exactly how many workers are available for the tourism sector is a difficult question to answer.
We see some hopeful news in the gap between employment levels and actual hours being worked in the sector. The fact that hours have fallen more than employment suggests that the workforce that has been retained is currently underutilized. This means there are existing workers who can work more hours as demand ramps up.
Many Canadians remain unemployed and are available to work. However, this will be balanced by concerns people have about working in the tourism sector due to perceptions of the industry that have been negatively affected by the pandemic and lingering health concerns.
At least some former tourism workers have moved to other industries. How many is difficult to say. When comparing May 2019 to May 2021, employment in tourism is down by 538,500, while overall employment is down 459,200. This does indicate that tourism is losing workers to other industries. We know that employment has risen in other sectors of the economy, particularly the finance, insurance, real estate, rental and leasing, and professional, scientific and technical services sectors. These jobs are being filled by a mix of former workers from tourism, former workers from other sectors, and new entrants to the labour force. How many workers come from each group is difficult to ascertain.
For more on the impact of COVID-19 on Canada’s tourism workforce, please visit our Employment Tracker.
[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.