To keep up to date on labour market needs and business conditions as the tourism sector settles into a new post-pandemic normal, Tourism HR Canada has been conducting a series of business intelligence surveys, thanks to funding from Economic and Social Development Canada (ESDC).
This latest report is the final in the current series, which has provided insightful data over the past three years on the operating conditions of tourism businesses across Canada. For this iteration, 350 businesses were interviewed via telephone between July 18th and August 13th, 2024.
Read on for some of the highlights from the full report, which is available for download below.
Comparison Highlights: Business conditions beginning to stabilize
Over the past three years, businesses have reported generally improving conditions around recruitment and retention:
- Reported job vacancies were significantly lower across the sector in August 2024 than they were in previous surveys, with 22% of businesses currently reporting unfilled positions (compared with consistently around 40% since September 2022).
- The number of businesses reporting difficulties with recruitment was at its lowest point in the series as well, currently at 40% (compared with 64% in August 2023).
- Fewer businesses also reported difficulties with retention (26% currently, compared with 38% last year).
While the number of businesses experiencing labour difficulties remained higher than we would ideally like to see, the fact that the numbers have come down significantly is an important development. It may signal that labour market conditions are returning to something closer to pre-pandemic conditions, or it may be that businesses have learned how to work more effectively with smaller workforces.Â
- Around 39% of respondents reported that labour issues have been a problem within the past four months, significantly lower than in August 2023 (61%).
- Labour issues continue to have an impact on finding qualified, reliable employees for 36% of respondents, also significantly lower than in August 2023 (53%).
Reports of improving business conditions have started to taper off since last year (28% in August 2024, 41% in August 2023), but this is to be expected:Â the further down the path of recovery that the sector comes, the more the pace of improvement will slow down.Â
- Increased non-labour costs of production (64%) and weak economic conditions (51%) are the two most widely-reported business challenges, followed by labour issues (39%)
A new question asked in this survey was around the use of AI in tourism businesses.
- Only around 25% of surveyed businesses use AI tools at least monthly, with 59% reporting that they do not use AI tools at all. Businesses in Travel Services are the most likely (45%) to regularly use AI technologies and tools than other industries.
- The most common tasks supported by AI tools are generating original or personalized marketing content (35%) and translating documents (32%). Other tasks frequently using AI tools include automating routine customer tasks, such as checking in or out and booking reservations (26%) and conducting research, such as marketing trends (25%)
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Recruitment and retention strategies
As labour market pressures have eased across the economy more broadly, the rate of tourism businesses reporting that they are using targeted recruitment strategies to recruit from under-represented talent pools has begun to fall. In April 2023, businesses were about twice as likely to target recruitment towards members of visible minorities, people with disabilities, and members of the 2SLGBTQ community than they were in August 2024. While in some senses this is a natural reaction to improved labour conditions, it is important that the tourism sector does not lose sight of the importance and long-term value in cultivating talent pipelines across diverse talent pools.Â
Social media and online job posting services remained the primary means for advertising jobs across the sector, and most businesses across all industry groups have reported improving their compensation offerings (wages, perks, and other incentives) as a strategy for retention.
Around 77% of businesses were not currently making use of any short-term immigration programs to meet their staffing needs, with rates of use of these programs having fallen since last year. The most commonly used program was the Temporary Foreign Worker Program (at 8%), with a further 7% relying on international students already in their communities. While both remain viable options in principle, in practice the government has recently been clawing back extra allowances introduced over the pandemic, so investing in local talent pools remains an important strategy across the sector, particularly in large urban centres.
Employee training was largely unchanged since last year. Only around 21% have increased the training they provide, and it is interesting to note that the global increase in demand for training has surpassed the reported increases in budget to deliver training. As productivity increasingly becomes central to workforce discussions over the coming years, maintaining staff training will be key to business success.
A closer look: Accommodations
A total of 115 businesses in the Accommodations industry took part in the survey. Around 64% of those businesses had between 1 and 19 employees; 17% had no employees (that is to say, they had no one on payroll: they may have used contract workers or relied on family members); and 17% had between 20 and 99 employees. The overwhelming majority of respondents (83%) had been open for more than 10 years, with 37% operating seasonally and 63% operating year-round.
- 19% of respondents reported job vacancies
- 42% reported difficulties in recruiting workers, and 28% reported difficulties in retention
- The most difficult occupations to fill and keep filled were in housekeeping and in maintenance
A closer look: Food and beverage services
Only 27 respondents to the survey were from food and beverage services, a slight decrease from earlier iterations of the survey; this somewhat limits the generalizability of the findings, but does not invalidate the specific findings for these respondents. Most had between 1 and 19 employees (74%), while 26% had between 20 and 99 employees. A strong majority (74%) had been open for more than 10 years. Only 19% operated seasonally, and 81% operated year-round.
- 25% of respondents reported job vacancies
- 56% reported difficulties in recruiting workers, and 37% reported difficulties in retention
- The most difficult occupations to fill and to keep filled were serving staff and roles in food preparation
A closer look: Recreation and entertainment
There were 110 respondents from the very broad category of Recreation and entertainment. Around 70% had between 1 and 19 employees; 20% had between 20 and 99 employees, and a further 5% operated with no employees. Almost all of the respondents (94%) had been open for more than years, with 43% operating seasonally and 57% operating year-round.
- 22% of respondents reported job vacancies
- 40% reported difficulties in recruiting workers, and 26% reported difficulties in retention
- The most difficult occupations to fill and to keep filled were in customer service/sales and in frontline supervisory positions
A closer look: Transportation
As with Food and beverage services, there were only a small number of respondents from Transportation (37), but it nevertheless important to understand the pressures as faced by those employers.  Nearly half (49%) had between 1 and 19 employees; 24% had between 20 and 99 employees; and 22% had no employees on payroll. The strong majority of businesses (86%) had been in operation for more than 10 years, with 30% operating seasonally and 70% operating on a year-round basis.
- 24% of respondents reported job vacancies
- 32% reported difficulties in recruiting workers, and 24% reported difficulties in retention
- The most difficult occupations to fill and keep filled were drivers and mechanics
A closer look: Travel services
There were 44 respondents from the Travel services industry group, which includes travel agencies and tour operators. Around 64% had between 1 and 19 employees, 25% had no paid employees, and 7% had between 10 and 99 employees. The strong majority of businesses (86%) had been in operation for more than 10 years, with only 5% operating seasonally and the remaining 95% operating year-round.
- 27% of respondents reported job vacancies
- 36% reported difficulties recruiting workers, and 14% reported difficulties with retention
The most difficult occupations to fill and keep filled were travel agents and tour planners
Strategic Insights
The labour market in tourism will remain tight for the foreseeable future, and developing strategies of recruitment that create long-term attachment to the sector will be key to maintaining the staffing levels that will allow businesses to thrive over the coming years. Continuing to build relationships of trust with talent from diverse communities and groups – particularly those who have historically been marginalized, underemployed, or otherwise excluded from the labour force – will enable the sector to remain strong, relevant, and locally-grounded. This includes seeking connections with Indigenous Canadians, racialized people, persons with disabilities, seniors, and members of the 2SLGBT community.
As immigration changes continue to be announced, and as those changes start to directly impact tourism businesses, it will become all the more important to connect with international talent already in the country. International students, those exploring Canada through working holiday visa programs, as well as refugees, asylum seekers and displaced people are among those legally able to work in Canada without employers taking on additional administrative burdens, and they bring a wealth of experience and expertise that can directly impact the tourism businesses in the communities where they live.
Download the previous Business Intelligence Reports
This project is funded by the Government of Canada
The opinions and interpretations in this publication are those of the author and do not necessarily reflect those of the Government of Canada.