As public health restrictions lifted over the summer months, tourism employment grew significantly. In May, there were 1.55 million employed tourism workers. By August, that number had increased by 341,000, reaching almost 1.9 million employed workers. Despite this, the sector fell well short of the level of employment seen in 2019.
August represented the fourth month of employment growth in the sector. Since April, tourism employment has been steadily rising. This year the trend may continue into September. Still, seasonal trends dictate that tourism employment will decline once more in the fall despite reopened borders. Whether this is true for all industries within the sector remains to be seen.
Data was collected the week of August 15 to 21, 2021.
Highlights:
- Tourism employment grew by 85,600 in July and 99,300 in August to reach 1,892,900 employed workers.
- Employment gains were in full time and part time.
- Overall, employment in the tourism sector was still down 13.1% compared to August 2019, ranging from -7.2% in food and beverage services to -44.8% in the travel services industry.
- Compared to 2019, the total number of hours being worked is even lower than employment levels. This suggests that tourism workers are working fewer hours on average than they would have prior to the pandemic.
- Compared to 2019, August tourism employment ranged from -4.3% in Manitoba to -23.2% in Newfoundland and Labrador.
- Student employment in the latter half of summer was higher than in 2019.
- Overall, seasonally adjusted employment was still 0.4% lower this August than it was in 2019.
- Unemployment remains elevated. As of August, there were 461,400 more unemployed than in February 2020, the last month prior to the pandemic. There were 327,000 more unemployed workers than in August 2019.
- The number of people not in the labour force (e.g., not employed or looking for work) remains elevated. But, this is driven by those below the age of 25 and older than 65. The number of people not in the labour force who are between 25 and 65 is lower than before the pandemic.
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 the summer months of 2021, tourism employment grew significantly. In May, there were 1.55 million employed tourism workers. By August, that number had grown by 341,000 to reach almost 1.9 million employed workers. The sector employed more people than last year, but remained well short of the level of employment seen in 2019. Of the workers who joined the tourism sector since May, 265,500 were full-time employees, and 75,500 were working part-time (defined as under 30 hours per week).
In three of the five tourism industry groups, employment grew in June, July, and August. The transportation industry lost workers in both June and July before seeing a recovery in August. Employment trends over the summer were mixed in the travel services industry, with employment losses in June and August, bookending an employment gain of 18.1% in July.
As of August, employment had not recovered to pre-pandemic levels in four of the five industry groups that make up the tourism sector. That said, summer has always been a time when employment grows significantly for some tourism industries, due to increased seasonal demand. Although it is good to see employment in the recreation and entertainment industry exceed pre-pandemic levels this summer, we need to take into account seasonal variation in employment levels.
When we factor in seasonal employment trends by looking at the same months in 2021 and 2019, we see that employment has a long way to go before it reaches pre-pandemic levels.
The good news is that compared to last year, employment is up—except for the travel services industry in August. Increased tourism employment relative to 2020 was expected. Despite shut-downs and the emergence of the Delta variant, vaccinations and a better understanding of required precautions allowed some level of reopening. However, the border only reopened to American travellers in late summer. Industries that rely more on other international travel markets are still seeing significantly suppressed employment levels.
Compared to the summer of 2019, employment is down in all industries. Employment recovered in August compared to July, thanks to the partial lifting of restrictions across the country. However, overall, employment in the tourism sector was down 13.1% compared to August 2019, ranging from -7.2% in food and beverage services to -44.8% in travel services.
Hours of Work
The total number of hours worked by employees in the tourism sector grew significantly relative to the same month in 2020. But like employment, hours significantly trailed the number of hours worked in 2019.
Compared to 2019, the overall number of hours worked in the tourism sector is lower than employment is. Employed tourism workers are working fewer hours on average than they would have prior to the pandemic. The decrease in hours suggests that some capacity exists for businesses to respond to labour shortages by increasing employees’ hours. However, this data could reflect changing work patterns. In August, full-time employment in tourism was down 16.4% compared to August 2019, while part-time employment was only down 5.9%. It may be that former full-time workers are working fewer hours because of weak demand due to COVID. But, it could be that full-time workers who lost their jobs did not return to the industry and have been replaced by part-time workers—who may not be seeking full-time hours.
Provincial Tourism Employment
Compared to last summer, tourism employment has increased in most provinces, with the notable exceptions of Newfoundland and Labrador and Quebec. Tourism employment in New Brunswick was lower compared to 2020 at the start of summer, but rose slightly higher in August.
Tourism employment was particularly robust compared to 2020 in Prince Edward Island (up 17.9%), Ontario (16.8%), and Alberta (15.4%).
In no province did employment come close to reaching 2019 levels. Generally, employment was higher in August than in July compared to the same month in 2019, with some exceptions, such as Newfoundland and Labrador and Prince Edward Island.
Compared to 2019, tourism employment in August ranged from -4.3% in Manitoba to -23.2% in Newfoundland and Labrador.
Student Employment
A key source of workers for the tourism sector are students who seek summer jobs. In 2020, student employment dropped dramatically. The unemployment rate for full-time students stood around 25% in July and August and was almost 40% in May.
This year, student employment across the economy was low and unemployment rates were elevated in May and June. However, student employment trends looked quite normal in July and August. The number of students who were employed in July was only slightly lower than in 2019 and even rose above 2019 levels in August. The participation rate[1] for students was roughly equivalent to the past two years, which means the pandemic did not discourage students from joining the labour force in 2021. Most importantly, the unemployment rate for students in 2021 was similar to 2019. Those students who joined the labour force found jobs in roughly equivalent numbers to 2019. A loss of students from the labour force is not driving labour shortages in tourism, since they are as available as they usually are. However, they may be taking jobs in industries other than tourism.
Labour Force Trends
As we entered the summer months, the number of job vacancies in the Canadian economy surged, reaching over 815,800 in June. Data on job vacancies within the tourism sector are not available. Still, within the accommodation and food services sector, employers were seeking to fill 130,000 vacant positions. The vacancy rate—the percentage of vacant positions relative to employed workers—was a staggering 12.7%. In other words, there was more than one vacant position for every ten employed workers. In the arts, entertainment and recreation sector, 16,355 jobs were vacant, giving that sector the second highest vacancy rate of 8.3%.
Labour Force Trends
As we leave summer 2021 behind us, economy-wide labour force trends will become a greater concern, and will feature more prominently in these reports going forward. The sector is entering the period where employment typically drops for many tourism industries. For the most part, Canada’s tourism sector is waiting until next year for demand to truly recover.
In the meantime, macro labour force trends will indicate how great future labour shortages could become. Currently, unemployment remains high and some young people are not actively engaged in the labour force. Despite the challenges facing business owners, there is slack in the labour market. That may not be the case by the time we start to hire for the summer of 2022.
Employment By Sector
Overall, seasonally unadjusted employment is up 1.8% from where it was in February 2020. But compared to the same month in 2019, employment still has not fully recovered to pre-pandemic levels. In August, total employment across the entire Canadian economy was 0.4% lower than in the same month of 2019.
In August, nine sectors had lower employment levels than they did in the same month two years ago, while seven sectors of the economy had higher employment. Notably, employment was up 9.4% in professional, scientific and technical services, and up 6.1% in the finance, insurance, real estate, rental and leasing sector. The sector with the greatest loss of employment in August was agriculture, which was down 16.5%. The decline in agricultural employment is notable because, until August, the greatest loss of employment has consistently been in the accommodation and food services sector. The growing employment losses in the agricultural sector are likely linked to difficulties employers face getting Temporary Foreign Workers (TFWs) into the country as well as challenges accommodating TFWs in the face of public health measures.[2]
Total Unemployed and Unemployment Rate
Overall unemployment levels remained elevated in July, and despite an increase in employment, the number of unemployed workers increased in August. In the 14 months prior to the pandemic impacting Canada’s labour market, 1.15 million people were looking for work each month, on average. The unemployment rate ranged from 5.2 (December 2019) to 6.4 (August 2019), levels that indicate very limited slack in the labour market.
This July, there were 1.6 million unemployed workers. In August, that increased 2.8% to 1.65 million unemployed workers. As of August, there were 461,400 more unemployed than in February 2020, the last month before the pandemic. There were 327,000 more unemployed workers than in August 2019. This shows that there are people available and looking for work. But they are not necessarily filling jobs in the tourism sector.
Not in the Labour Force – Not Employed, Not Seeking Work
In August, the number of people who are not in the labour force (i.e., not working and not seeking work) declined. The decline was concentrated amongst those over the age of 25. The number of people over 25 not in the labour force declined by 116,000. However, the number of people aged 15 to 24 who were not actively engaged in the labour force increased in August by 40,200. This increase suggests that young people were discouraged by the job market. They either stopped seeking employment or left jobs they had and did not seek a replacement job.
Compared to the pre-pandemic era, the number of people over the age of twenty-five not in the labour force does remain somewhat elevated. However, this is entirely driven by those over the age of 65 (see figure 17). For those between 25 and 65, the number of people not actively engaged in the labour force has declined. This decline can be seen relative to the start of the pandemic and relative to the same month in 2019.
Reason for Not Seeking Work
Overall, the number of people who want to work but are not in the labour force remains slightly elevated. This implies that there are people who are not working who can be brought back into the labour force; however, the number is not great.
As demand starts to return to different parts of the tourism sector, businesses’ ability to find workers has become much more difficult than ever before. Even before the pandemic, the demand for tourism was growing faster than the ability of the labour force to supply enough workers to meet that demand. In November 2019, projections of long-term labour supply for tourism had found that 93,000 full-year tourism jobs would go unfilled by 2035.
Employment levels in the tourism sector usually decline in September. This year, because we are still reopening, it is likely that employment will grow slightly. However, come October and November, the seasonality that affects this sector will take hold and employment will drop once more. For the most part, our industry is still waiting until next year for demand to truly recover.
In the meantime, macro-level trends within Canada’s labour market will indicate the severity of labour shortages the sector will operate with next year. Currently, unemployment remains high and some young people are not actively engaged in the labour force. Despite the challenges facing business owners, there is some slack in the labour market.
That may not be the case come spring of 2022.
[1] Participation rate is the percent of students who have found employment or are actively seeking work.
[2] Understanding the Effects of COVID-19 on Canada’s Agricultural Workforce