In 2023, the tourism sector is still in flux, reeling from three years of major impacts to the sector 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 third of 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, 300 businesses were interviewed by telephones survey between April 3 and May 1, 2023.
A full report analyzing the results of this survey is now available. Highlights are provided below.
Comparison Highlights (April 2023 vs. January 2023)
Comparing April’s survey results against January’s, businesses indicate an increase in several tactics to improve retention: businesses are more likely to have created a culture of work-life balance (23% vs. 9%), increased opportunities for more consistent work/better job security (18% vs. 7%), and improved orientation/onboarding processes for new hires (16% vs 7%).
Businesses are much more likely to use targeted recruitment practices to recruit members of visible minorities (74% vs 41%), people with disabilities (67% vs 30%), women (56% vs 25%), and 2SLGBTQI+ individuals (54% vs 29%). As a recruitment strategy, word of mouth has decreased (14% vs. 25%).
Difficulty with recruitment has decreased within the accommodations industry (50% vs. 64%).
The number of businesses that are experiencing any form of business challenge has increased significantly (79% vs. 70%). In particular, more businesses indicate experiencing increased cost of production (non-labour) (57% vs. 47%) and labour issues (39% vs. 29%) as chief concerns, as well as increased challenges related to cash flow and/or financial management (39% vs. 26%).
Businesses who offered new products/services in 2022 were more likely to experience increased opportunities for development/growth (17% vs. 2%) and less likely to experience increases in customers/guests (6% vs. 17%).
The demand to provide training has drastically increased within the food and beverage services industry (21% vs. 5%).
Operating Conditions of Tourism Businesses
Of those interviewed, 34% of businesses represent the accommodations industry, 31% recreation and entertainment, 13% food and beverage services, 13% travel services, and 9% the transportation industry. Close to three-quarters (73%) of businesses are open with no limitations or restrictions, consistent with Jan. 2023 (66%). Businesses in provinces across the country similarly report being open, with no limitation/restrictions.
Over one-fifth (22%) have no paid employees, with most businesses having between 1 and 19 employees (58%). Nearly three-quarters (70%) of businesses operate on an annual basis, and those who operate on a seasonal basis operate predominantly in the summer (91%), followed by fall (49%) and spring (42%).
Two-thirds (67%) are owner-operator businesses, and 64% report being in operation for over 20 years. Over half (54%) of businesses indicate having an annual gross revenue of less than $500,000, significantly more than in January 2023 (46%). Over one-third (35%) indicate they operate in a small population centre, and 29% indicate operating in a rural or remote region.
Recruitment and Retention
Just over two-in-five (43%) businesses interviewed currently have job vacancies, consistent with January 2023 (37%). This finding was also consistent across all industries and provinces. Of businesses with job vacancies, on average there are four vacancies at their place of business. Travel services businesses report an average of five job vacancies, as do businesses in British Columbia. Businesses in Saskatchewan/Manitoba and Quebec report on average two job vacancies across all industries.
Half (50%) of all businesses are experiencing difficulties with recruitment of workers, and 31% are experiencing difficulties with retention; both consistent with January 2023. The greatest difficulties in recruitment and retention across industry groups are as follows:
- Accommodations – Housekeeping (recruitment: 80%; retention: 81%)
- Food and Beverage Services – Food Preparation/Cooks (recruitment: 68%) and Service Staff (retention: 92%)
- Recreation and Entertainment – Maintenance, Customer Service Representatives/Sales and Customer-Facing Staff (recruitment: 24%) and Customer-Facing Staff (retention: 40%)
- Transportation – Driver (recruitment: 47%) and Driver, Pilot (retention: 33%)
- Travel Services – Travel Agent (recruitment: 67%; retention: 60%)
For recruitment strategies, businesses indicate increasing recruitment efforts (34%) and improving wages, benefits, perks, etc. (19%) to fill job vacancies. In January 2023, businesses were more likely to use word of mouth as a recruitment strategy (25% vs. 14% in April 2023). For retention strategies, businesses also improved wages, benefits, perks, incentives, etc. (49%) and created a culture of work-life balance (23%). Businesses in April 2023 were significantly more likely to create a culture of work-life balance compared to January 2023 (23% vs. 9%).
Few (13%) businesses use targeted recruitment practices for individuals from equity-seeking groups. Groups that are sought out include members of visible minorities (74%), people with disabilities (67%), Indigenous Peoples (56%), and women (56%), at a greater proportion than in January 2023 (aside from Indigenous Peoples). The majority (81%) of businesses do not use any immigration programs to recruit workers; however, 40% of businesses indicate they would consider using international student programs for future recruitment, followed by the Temporary Foreign Worker Program (38%), International Experience Canada (35%), and Provincial Nominee Programs (34%).
Comparison to the Previous Years of Operation
Fewer than half (43%) of businesses indicate their current operating conditions have improved compared to this time last year. For businesses whose operation conditions have weakened, 33% are considering reducing operating hours.
Nearly a quarter (24%) of businesses report having offered new types of products or services in 2022. Of those who offered new types of products or services, businesses experienced an increase in profits/revenue (20%) and opportunities for development/growth (17%). Nearly one in ten (9%) of businesses offered products or services over the internet for the first time in 2022, 50% of whom indicated that it improved their business operating conditions, consistent with January 2023 (40%).
A quarter (26%) of businesses will be offering new types of products in the coming months. Of those who did not offer online products in 2022, 9% indicate they will offer new types of products over the internet for the first time in the coming months.
Currently, 79% of businesses are experiencing any form of business challenge, significantly more than in January 2023 (70%). The top challenges currently experienced include increased cost of production (non-labour) (57%), labour issues (39%), and weak economic conditions in Canada (39%). Significantly more businesses in April 2023 indicate experiencing increased cost of production (non-labour) and labour issues than in January 2023 (57% vs. 47% and 39% vs. 29%, respectively). Further, in the past four months, businesses experienced financial challenges (13%) and labour issues (13%). Of those who are currently experiencing labour issues and have in the past four months, 51% agree that difficulty finding qualified, reliable employees and the shortage of skilled labour in the local area (43%) have had a great impact on their business.
Close to half (49%) believe they will increase the number of employees within their business in the next four months, consistent with January 2023. This is primarily due to an increase in the number of visitors coming to their region (67%) and an increase in the number of events or tourism products in their region (53%). However, of those increasing the number of their employees, 59% state there is an insufficient number of qualified workers to meet their operation’s hiring needs, consistent with January 2023.
Employee Training
Compared to this time last year, the majority state that all factors relating to employee training procedures have remained unchanged at their business. Only 20% of businesses state that there has been an increase in the overall amount of staff training provided.
Businesses report that employee training has had a great impact on client/customer satisfaction (26%) and employee satisfaction (23%). Many (71% and 62%) 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 continue to express concern that there is an insufficient number of qualified workers to meet their hiring needs. Further, businesses are experiencing more challenges than in January 2023, such as increased cost of non-labour production and labour issues, as concern regarding the economic conditions within the country continues to grow.
Moving away from the peak of the pandemic, businesses continue to expect an increase in events and visitors to their region. As businesses intend to increase the number of employees, focus should be on housekeeping, food preparation/cooks, service staff, and travel agent roles, as they are in high demand and businesses experience difficulties recruiting and retaining individuals with the required skill sets.
It is recommended that the tourism sector continue to identify and target local talent through advertising and marketing to increase awareness of and interest in the sector and the opportunities within. Specifically, there is an opportunity to educate those within the sector on the different employee recruitment programs currently available to them, including international and immigration programs. Additionally, focusing on creating a culture of work-life balance and improving wages, benefits, and perks may help employees with the back to work transition as we move away from the pandemic.
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.