Nearly 90% of Year-Over-Year Employment Losses in Tourism
Tourism employment decreased for the third month in a row in December, falling by 56,700, a 3.5% decrease from November. (Data is from the week of December 6 to 12.)
Tourism employment decreased in all provinces except in Quebec, where employment essentially flat, increasing by a miniscule 200 (or 0.1%), and in New Brunswick (1,600). The biggest drops occurred in Alberta (-18,400), Ontario (-17,500), and Nova Scotia (-9,700). Nova Scotia’s decrease is notable as it is a 20.6% decrease in employment relative to November. The decrease is similar in size to the employment drop that occurred in Manitoba this November. Similar drops may be seen in the January data for Ontario and Quebec.
- Tourism employment declined by 56,700 in December, a decline of 3.5% from November.
- On a year-over-year basis, seasonally unadjusted employment across all Canadian industries was down 3.1% compared to December 2019. In comparison, tourism employment was down 24.9% from the same month a year ago.
- The largest monthly drops in employment occurred in Alberta (-18,400), Ontario (-17,500), and Nova Scotia (-9,700).
- At 14.6%, tourism’s unemployment rate was above Canada’s seasonally unadjusted unemployment rate of 8.0%.
- December is the fourth month in a row in which the tourism labour force declined.
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 December, employment (unadjusted for seasonality) across the entire Canadian economy decreased by 113,900. Overall, tourism employment dropped by 56,700 jobs due to a loss of 40,500 full-time jobs and 16,000 part-time jobs.
From November to December, employment declined in the accommodation (-5.4%), food and beverage services (-3.2%), recreation and entertainment (-5.6%), and transportation (-2.3%) industry groups. Only the travel services industry added employment, although that was caused by a loss of 3,400 full-time jobs being offset by a gain of 6,100 part time jobs.
In December 2020, tourism employed 1,568,300 workers, a quarter fewer than in December 2019, when the sector employed almost 2.1 million people.
In the food and beverage services industry group, employment decreased by 25,100, the largest drop among tourism industry groups. It was closely followed by recreation and entertainment, where employment was down 20,400. In those industries, both full-time and part-time employment decreased.
Despite adding some part-time jobs, overall employment continued to drop in the accommodation industry, which has seen monthly employment declines since August.
Employment in the transportation industry fell 7,300, while employment in the travel services industry increased 2,700, the third month of employment increases in that industry. Despite losing the greatest share of employment during the spring, travel services employment has now almost recovered to March levels.
Because the industry groups that make up tourism are different sizes, looking at the monthly change in employment as a percentage increase or decrease 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. Among industry groups, the transportation industry has lost the least employment relative to February 2020, down 17.1%.
In the initial months of the pandemic, the travel services industry lost the greatest percentage of employment. Employment in that industry group dropped even further in August and September, following a mild recovery in June and July. In September, employment in travel services was 50% lower than it had been in February. However, following three months of increases, employment is now only 18.8% lower than at the start of pandemic.
As of December, the accommodation industry has now lost the greatest percentage of employment relative to February. Despite employment gains between May and August, the end of the summer tourism season has resulted in ongoing losses in employment. Occupancy rates in Canada peaked at 42.9% the week ending August 22 and have declined ever since, reaching 23.5% the week ending December 19 and falling below 20% over the Christmas holiday. Accommodation employment is now down 33.1% since the start of the pandemic.
Despite having come close to getting back to February employment levels in August, the recreation and entertainment industry had 27.5% fewer workers in December than it did at the start of the pandemic. Some of the employment losses in recreation are to be expected, however, as seasonal operations such as golf courses close.
The food and beverage services industry group also saw its third month of employment decreases. While this industry usually sheds some employment in the fall, continued losses into November and December this year have greatly exceeded what would normally be expected. Following the pandemic, food and beverage sales peaked at $5.5 billion in August, but then declined to $4.85 billion in October. October sales were $1.76 billion lower than they were one year prior and are expected to drop further in November and December due to tightening restrictions.
On a year-over-year basis, seasonally unadjusted employment across all Canadian industries was down 3.1% compared to December 2019. In comparison, tourism employment was down 24.9% from the same month a year ago. Tourism’s employment decrease currently makes up 87.9% of all year-over-year employment losses. By industry group, year-over-year employment losses in December ranged from -36.5% in accommodations to -15.4% in transportation.
Employment losses due to COVID-19 have not been evenly spread across the economy. Tourism industries employed 10% of Canadian workers before the pandemic, but a much greater share of COVID-19 related employment declines occurred within the sector. Tourism employment losses made up half of year-over-year employment losses in March, as tourism businesses were among the first to be forced to close and to see demand dry up as international borders were closed. In the following two months, many other industries closed or lost demand for their products, and tourism’s share of total employment losses decreased, even as the number of unemployed tourism workers grew.
As restrictions were loosened, the share of year-over-year employment decreases attributable to the tourism sector began to grow once more. While other industries were able to reopen, many tourism businesses remained closed. Once the summer ended, tourism’s share of total year-over-year employment losses ballooned, only falling slightly in December as restrictions once again began to affect industries such as retail.
Most provinces saw a loss of tourism employment in December. The largest drop in employment occurred in Alberta, Ontario, and Nova Scotia. Manitoba also experienced a significant drop considering that it followed a 22.6% drop in employment in November.
In all provinces, tourism employment was well below that seen in December 2019. On a year-over-year basis, the greatest employment losses were in Saskatchewan, Alberta, and Manitoba. Employment was closer to last year’s levels in Atlantic Canada, with the exception of Nova Scotia.
Tourism Unemployment Rate
In December 2020, the unemployment rate in the tourism sector was at 14.6%, which is 10 percentage points higher than the rate reported in December 2019 and higher than the previous month (November 2020), when the unemployment rate stood at 13.9%.
At 14.6%, tourism’s unemployment rate was above Canada’s seasonally unadjusted unemployment rate of 8.0%.
All tourism industry groups have reported higher unemployment rates than the same month last year. In December, the tourism unemployment rate increased due to an increase in the number of unemployed tourism workers and a decrease in the overall tourism labour force. The unemployment rate is calculated by taking the labour force (the total of employed and unemployed individuals) and dividing it by the number of unemployed persons whose last job was in the tourism sector. While the number of employed tourism workers decreased by 56,700 in December, the number of unemployed individuals only rose by 5,600. The tourism labour force decreased by 51,200, indicating that most individuals who had lost their jobs had not yet started seeking other work. This is likely due to COVID-19 restrictions that make seeking new employment difficult.
|Tourism Industry Group||
|Food & Beverage Services||4.0%||13.5%||13.6%|
|Recreation & Entertainment||7.0%||13.3%||16.7%|
On a provincial basis, tourism unemployment rates ranged from 7.7% in British Columbia to 33.7% in Prince Edward Island. The seasonally unadjusted unemployment rates for tourism in each province, with the exception of Newfoundland and Labrador, were above the rates reported for the provincial economy.
Shrinking Tourism Workforce
Since October, declines in tourism employment have greatly exceeded the sector’s average monthly declines.
Figure 11: Average Monthly Employment Change in Tourism (2001-2019 vs. 2020)
|Average Monthly Employment Change 2001 to 2019||Monthly Employment Change 2020|
December is the fourth month in a row in which the tourism labour force declined. Some decline is to be expected in September and October, as student workers return to school. Ongoing losses into November and December are more concerning. The fall labour force decline usually slows in November and December. Although the current decline is likely due to unemployed tourism workers not seeking new employment due to labour market conditions, the overall tourism labour market never fully rebounded to 2019 levels.
Total Actual Hours Worked by Sector
Despite December’s drop in employment, the total actual hours worked increased by 3.4% from November to December. Increases in actual hours worked occurred in most sectors, the notable exceptions being agriculture (-11.2%), accommodation and food services (-7.1%), and business, building and other support services (-2.9%).
While the total actual hours worked increased from November to December, Canadians are still working fewer hours than in February. But the story varies by sector. In some industries, employment has increased and Canadians are working more hours than in February. However, those sectors that are still below February levels in terms of employment and hours of work are well below where they were, clearly showing how the economic pain is not evenly spread. The number of actual hours worked in tourism-related sectors continues to be well below normal levels. In December, accommodation and food services employees worked 21.7 million hours, 10 million fewer than they worked in February.
Workers in the information, culture and recreation sector worked slightly more hours than in November, but still worked 2.5 million fewer hours than in February.
Where to From Here?
The past year was nothing short of catastrophic for the tourism industry.
We enter the new year assessing where we are and looking forward.
Secondary lockdowns in response to rising COVID-19 case counts are needed, but are punishing. No clear timetable is yet discernable for a resumption of international travel to Canada, which now seems dependent on how quickly vaccines can be made available, particularly to contain the spread of new, more transmissible strains of the virus.
The current situation is grim and highly volatile. Yet, the availability of vaccines does mean an eventual reopening of local consumption, domestic travel, and ultimately international travel. As a sector, we need to start preparing for that future. It will a brighter day, but it will come with its own challenges.
 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.