The Toronto tourism economy is rebounding strongly, but there are plenty of cautionary flags flying in the June breeze.
I had a chance to sit down (virtually) the other day with Andrew Weir, Executive Vice President Destination Development for Destination Toronto, to talk about where the city is headed. Nobody’s popping the champagne corks just yet, but they might be thinking of what they might want to order at the LCBO when the time comes.
“There’s absolutely a sentiment in the community now that we’re on the on-ramp back to that state of a thriving visitor economy,” Weir said. “I don’t think there’s anyone who thinks we’re driving at full highway speed, but there’s a feeling we’re on the on-ramp. Even that is new compared to a few months ago.”
Asked how things look in terms of leisure travel versus business bookings, Weir said Toronto has always been noted for having a highly diversified visitor economy.
“We’re dependent in equal measure on business and leisure,” which includes domestic, US visitation and international tourism, he said. But the recovery isn’t as fulsome on the business travel front as it on the leisure side of the ledger.
“The good thing about having a diversified economy is that you have lots of ability to grow, and if one segment is under-performing, it can be offset, at least temporarily, by an over-performing sector. The downside is that when you have a diversified visitor economy you don’t get back to full speed until all those segments are funning at their full speed, and they’re not currently doing that.”
Domestic leisure travel in Toronto is quite strong, but the city is a little over-reliant on that segment at the moment.
Still, there are very positive signs. Weir said Toronto hotels the past two weeks reported occupancy rates of more than 70%.
The Hazelton Hotel is in the heart of Toronto’s trendy Yorkville area. JIM BYERS PHOTO
“We’re looking at a strong and steady again.”
At the same time, things have changed a little. Historically in the month of April, the city would have had more bookings during the week and less on the weekends, as business travel would dominate the leisure sector. This year, with business travel in Canada slower to rebound, it’s been busier on weekends than on weekdays, he said.
Weir said the second half of 2022 looks strong for meetings and event bookings. Ditto for 2023. But a lot of those are sessions that were due to happen in 2020 or 2021 and were cancelled, and then re-booked or re-scheduled.
It’s somewhat similar to the SARS tourism scare Toronto went through in 2003. The following couple years weren’t so bad, but few event planners booked big conventions for the city in the time when SARS was in the headlines, which meant it was quiet around 2007 and 2008. If the same pattern holds for COVID-19, it could be that Toronto’s biggest challenges on the biz front will be in 2024 or 2025.
Weir noted that U.S. cities have an advantage over Canadian destinations because the U.S. was open for tourism earlier. They also didn’t have the kind of travel restrictions that Canadian cities faced, which meant it was easy for American business people to travel among the states and territories of the U.S..
Some office workers are returning to the city core, but many are working at home a good deal. That’s a problem for downtown businesses that rely on that five-day-a-week influx of office workers.
“Many restaurants in the city do a better lunch business than dinner,” Weir pointed out.
The Broadview Hotel in Toronto, a wonderful addition to the city. JIM BYERS PHOTO
Staffing, of course, is an issue for just about every type of business in the world. The hospitality sector is no different.
“Work force concerns are at a high, high level right now,” he said. “It’s not just the availability of workers in Toronto, but it’s a matter of affordability. Some people who work in the hospitality sector can’t afford to live in the city in the first place.”
Weir said Destination Toronto continued to market the city during the pandemic, albeit mostly on a local and Canadian level.
“That’s not going to go away,” he said. “There’s been an enlightenment among destination marketers around the world and a recognition that residents are a fundamental audience and we can’t simply look past residents when we’re talking about potential visitors. Residents have to be part of the conversation from start to finish.”
Weir said Toronto this month will begin a tourism campaign in the U.S., in partnership with Destination Canada. They’re also doing a good deal of work in Europe with Destination Canada and Destination Ontario, as Europeans right now seem more willing to travel than people in other parts of the world.
China, the city’s top international source for visitation, is still pretty much locked down. Japanese and South Korean visitation numbers for Toronto have been strong in recent years, but residents of those two countries also aren’t travelling in the numbers Toronto is accustomed to seeing.
Toronto Pearson Airport. JIM BYERS PHOTO
In addition to hotels not getting as much business as they might like, Toronto Pearson also is still lagging in terms of flights from Asia,, Weir pointed out.
“Getting the Pearson hub back is important to the city. It took us decades to get that degree of global connectivity, so getting it back is important.”
Having flights from Toronto to, say, Savannah, Georgia might not seem like that big a deal for the southern Ontario economy. But Weir explained that if a meeting planner books someone from Savannah on a flight to Europe and they switch planes in Toronto, that planner might think “Oh, Toronto has flights from 35 U.S. cities; that’s a good place for a business meeting.”
Pearson receives more flights from the U.S. than any non-U.S. airport on the planet, Weir noted. If you look at the ten most serviced routes in the world, such as Shanghai-Beijing or London-Paris, the only one in North America on the list is Toronto-New York City.
“Not even Chicago or Los Angeles have as many flights out of New York City” as Toronto, he said. “In fact, Toronto Pearson (which has U.S. Customs pre-clearance) is the fourth largest entry point to the U.S. in the world, or it was prior to the pandemic. Tens of thousands of people enter the U.S. through pre-clearance every day.
“It’s pretty incredible.”
