In 2023, the tourism sector is still in flux, reeling from three years of major impacts from the COVID-19 pandemic.
To assess labour market needs resulting from the pandemic, as well as to gather information that will help support recovery in the tourism sector, Tourism HR Canada is conducting a series of business intelligence surveys, thanks to funding by Employment and Social Development Canada (ESDC).
This current report presents the second out of five waves of data that will be collected through to 2024, tracking changes and/or measuring trends in the labour market during/following the pandemic.
For this wave, 342 businesses were interviewed by telephone survey in January 2023.
A full report analyzing the results of this survey is now available as a free download, and highlights are provided below.
Click here to download the Business Intelligence Survey Report
Comparison Highlights (January 2023 vs. August/September 2022)
When comparing the results of the January 2023 survey with one conducted in August and September 2022, fewer tourism businesses currently have job vacancies (37% vs. 46%). Specifically, there are fewer job vacancies in accommodations (35% vs. 50%) and in recreation and entertainment (32% vs. 44%). However, businesses in travel services report having significantly more job vacancies (67% vs. 42%).
Difficulty with recruitment has decreased significantly overall (56% vs. 64%). However, frontline supervisory staff in the accommodations industry (31% vs. 18%), bartenders in the food and beverage services industry (74% vs. 44%), and frontline supervisory staff in the recreation and entertainment industry (27% vs.14%) are significantly more difficult to recruit/retain now than in October.
In terms of retention strategies, businesses are less likely to provide increased flexibility to workers (13% vs. 25%), create a culture of work-life balance (9% vs. 22%), or create a more inclusive workplace for underrepresented employees (5% vs. 15%) to reduce job vacancies.
Fewer businesses are considering reducing operating hours (20% vs. 39%).
Significantly fewer businesses indicate e-commerce improved their business conditions (40% vs. 60%).
Regarding business challenges faced in the past four months, significantly fewer businesses are currently experiencing labour issues (49% vs. 62%) and government regulations/restrictions related to COVID-19 (19% vs. 29%). Significantly more businesses in the accommodations industry are experiencing inadequate marketing and/or promotional activities (23% vs. 13%), while fewer businesses in travel services are experiencing financial challenges (21% vs. 60%) and a lack of stable government funding (17% vs. 42%).
The challenge of accessing financing has lowered significantly (8% vs. 16%).
Significantly more businesses believe they will increase the number of employees within their business in the next four months (45% vs. 34%). However, of those increasing the number of their employees, the percentage of people who state there is an insufficient number of qualified workers to meet their operation’s hiring needs has not changed significantly.
The use of targeted recruitment practices and the groups targeted remains essentially unchanged.
The number of businesses offering new types of products or services remains consistent from August/September 2022 to January 2023, as does the impact of these products/services.
Current Operating Conditions of Tourism Businesses
Of those interviewed, 36% of businesses represent the recreation and entertainment industry, 33% accommodations, 12% food and beverage services, 9% transportation, and 7% travel services. Two thirds (66%) of businesses are open with no limitations or restrictions. Those operating in Ontario report a larger proportion operating with restrictions.
Of those surveyed, 15% have no paid employees, with the majority of businesses having between 1 and 19 employees (64%). Looking at seasonality, 70% of businesses operate on an annual basis, and those who operate on a seasonal basis operate predominantly in the summer (89%), followed by fall (58%) and spring (54%).
Nearly two-thirds (64%) of businesses are owner-operator businesses, and 68% report being in operation for over 20 years. Close to half (46%) of businesses indicate having an annual gross revenue of less than $500,000. One-third (33%) of businesses indicate they operate in a rural or remote region and over one-quarter indicate operating in a small population centre (27%).
Recruitment and Retention
Nearly two-in-five (37%) businesses interviewed currently have job vacancies; this finding was consistent across all tourism industry groups. Of businesses with job vacancies, on average there are four vacancies at their place of business—however, transportation and food and beverage services report an average of five job vacancies in each industry.
Over half (56%) of all surveyed businesses are experiencing difficulties with recruitment of workers. Only 36% are experiencing difficulties with retention. Survey participants reported the role for which they are facing the greatest difficulties in recruitment and retention; looking at each industry group, these roles are as follows:
- Accommodations – Housekeeping (71%)
- Food and Beverage Services – Bartender (74%)
- Recreation and Entertainment – Customer service representatives/sales (38%)
- Transportation – Drivers (67%)
- Travel Services – Travel agents (56%)
In terms of recruitment strategies, businesses indicate increasing recruitment efforts (39%) and using word of mouth (25%) to fill job vacancies. For retention strategies, businesses improved wages, benefits, perks, incentives, etc. (50%); provided increased flexibility to workers (13%); and provided additional growth opportunities (12%).
Less than one-fifth (18%) of businesses use targeted recruitment practices for individuals from equity-seeking groups. Groups that are sought out include Indigenous peoples (43%), members of visible minorities (41%), and people with disabilities (30%). The majority (83%) of businesses do not use any immigration programs to recruit workers, however 44% of businesses indicate they would consider using international student programs for future recruitment, followed by Temporary Foreign Workers (41%) and International Experience Canada (40%).
Comparison to the Previous Years of Operation
Over half (54%) of surveyed businesses indicate their current operating conditions have improved when compared to the summer of 2021, with those in the travel services industry stating the greatest level of improvement (71%). For businesses whose operation conditions have weakened, 22% are considering reducing staffing and reducing operating hours (20%).
Just over a quarter (26%) of businesses report offering new types of products or services in 2022. Of those who offered new types of products or services, they experienced an increase in profits/revenue (19%) and an increase in customers (17%). Of the 12% of businesses who offered products or services over the internet for the first time in 2022, 40% indicated that it improved their business operating conditions.
Looking ahead, just over a quarter (26%) of businesses will be offering new types of products in the coming months. Of those who have not previously offered products over the internet, 7% indicate they will try this for the first time in the coming months.
Currently, 70% of businesses are experiencing any form of business challenge. The top challenges currently experienced include increased cost of production (non-labour) (47%), weak economic conditions in Canada (32%), and labour issues (29%). Similarly, in the past four months, businesses experienced increased cost of production (non-labour) (25%) and labour issues (21%). Of those who are currently experiencing labour issues and have in the past four months, 54% agree that difficulty finding qualified, reliable employees and the shortage of skilled labour in the local area (38%) have had a great impact on their business.
Close to half (45%) believe they will increase the number of employees within their business in the next four months. This is primarily due to an increase in the number of visitors coming to their region and an increase in the number of events or tourism products in their region. However, of those increasing the number of their employees, 61% state there is an insufficient number of qualified workers to meet their operation’s hiring needs.
Employee Training
Compared to 2021, the majority state that all factors relating to employee training procedures have remained unchanged at their business. Only 25% of businesses state that there has been an increase in the overall amount of staff training provided and the hours spent on training for managers/supervisors (24%) when compared to 2021.
Businesses report that employee training has had a great impact on client/customer satisfaction (28%) and employee satisfaction (26%). Around two-thirds (69% and 62%) of businesses indicate they have the capacity (to some/great extent) to provide training to frontline staff and supervisory/management staff, respectively.
Strategic Insights
Businesses in the tourism sector continue to experience concerns regarding the recruitment of employees. Businesses that are growing express a concern that there is an insufficient number of qualified workers to meet their hiring needs. Further, there is growing concern regarding the economic conditions within the country. There is an indication that businesses may feel that the tourism sector is experiencing a labour shortage.
With the loosening of restrictions and moving away from the peak of the pandemic, businesses are expecting an increase in events and visitors to their region. There is an anticipated need for tourism employees to fulfil roles in high demand within the sector. Housekeeping, bartenders, and drivers are in particularly high demand and businesses are experiencing difficulties recruiting individuals with the required skill sets.
Tourism operators will need to increase their recruitment of local talent if they are to fill vacant conditions, and should consider more aggressive marketing techniques to raise the profile of the sector and of the job opportunities it affords. Additionally, there is an opportunity to educate those within the sector on the different employee recruitment programs currently available to them, including immigration programs.
Click here to download the Business Intelligence Survey Report
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.