Helpless Tourism Industry in Ontario: stay home, stay safe, stay poor

di Priscilla Pajdo del June 3, 2020

TORONTO - The phrase “stay safe, stay at home” has been echoed around the nation. Canadians have been doing just that in an effort to slow the spread of Covid-19. Foreign visitors are also staying home. Either they cannot leave, or they are not allowed in. Not surprisingly, in the tourism industry is in steep decline, if not total arrest.

If the government is going to restart the economy, it will have to pay attention to one of its drivers: the tourism industry. The federal government just earmarked $30 million to do that. There appears to be a “catch”. Funds originally destined for attracting foreign visitors will be now be distributed to destination marketing organizations across the country or, in our case, southern Ontario.

Is it enough? Tourism dependent areas like the iconic Niagara Falls and the Niagara Region will receive $4.5 million in marketing dollars. Niagara Falls Mayor, Jim Diodati, was excited about the funds, but “marketing dollars aren’t going to help when you’re closed”, he said in an exclusive interview with the Corriere Canadese.

Niagara Falls has been shut down for the past three months. This has cost 98% of the tourism industry approximately 40,000 jobs. They may come back. “The Bigger issue…Fixed and Operating costs for the last 3 months” will not be recovered, said Mayor Diodati.

Niagara Falls is requesting $94 million from the Federal Government. That is what it may take to recover what was lost in fixed and operating costs resulting from the closures due to Covid-19. The problem goes deeper. The Niagara region sees on average thirteen million visitors annually (Niagara Region Report 2017). The majority of visitors (67%) who come to the region originate in Canada. The largest portion of that total - 65% - come from Ontario alone. The virtual “lockdown” is keeping those people at home to stay safe. Canadian borders have also been closed to non-essential travel.

In effect, that shuts o the other 33% of visitors coming from the US and overseas (see chart 1).

Visitors coming from the US represent 25% of all tourists annually to the Niagara region. Visitors fl ock to Niagara Falls and the Niagara Region for various reasons. Considered one of the “Natural Wonders of the World”, “the Falls” themselves are one of the primary draws to the area. Casinos, restaurants, historical sites, entertainment, wineries, shopping…the list goes on for what draws people. Those tourists (13 million as per the report referenced above in 2017) spend nearly $2.4 billion annually.

Chart 2 illustrates the expenditures by origin.

Ontario visitors bring in the largest portion, $1.41 billion. Visitors from the US and overseas bring in $827 million into the region - for 35% of all tourism expenditures in Niagara Region. If the borders do not open up, that is potential income lost.

Chart 3 illustrates the average expenditure per capita by tourists, in normal times, in the region.

Even if international ports of entry are re-opened, but American border point stay closed, that would be a huge loss for the local industry. The federal strategy is to attract more “locals” to the area, through marketing strategies. However, Ontario has yet to give the “green light” to phase two of reopening. Until it does, most areas will remain closed in Niagara Region; and, the hope is that not all will be lost for the summer season.

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