Thursday,  December 1, 2022  4:32 am

Travel services down by more than three quarters since 2019: StatCan

  • Buzz
  •   10-25-2022  8:53 am
  •   Pax Global Media

Travel services down by more than three quarters since 2019: StatCan
(File photo)
Pax Global Media

Statistics Canada has released its latest data on the country’s travel arrangement service industries, stating that the sector generated $3.5 billion in operating revenue in 2021, marking a 55.4% fall from 2020.

Since 2019, these industries' operating revenues have dropped by 76.0%, which is a decrease of more than a combined $11 billion in revenue.

The results are obviously linked to the effects of the COVID-19 pandemic, which, in Canada, resulted in some of the strictest border and travel restrictions in the world.

The pullback was more pronounced in 2021 compared with 2020, mainly because the early winter months of 2020 operated normally, StatCan says.

Packaged tours to travel to sun destinations during those winter months make up a significant portion of annual revenue for these industries, particularly for tour operators.

In 2021, Ontario accounted for the largest share of revenue (40.3%), followed by Quebec (22.5%), British Columbia (19.6%) and Alberta (11.6%).

Statistics Canada divides this group into three industries: tour operators, travel agencies, and other travel arrangement and reservation services.

Other travel arrangement and reservation services accounted for the largest share of revenue at 48.9%, “which is usually not the case.”

This industry includes several types of companies, “most of which were not as affected by border closures as tour operators and travel agencies.”

“Tour operators normally account for more than half of revenue in this industry group,” StatCan reports.

Tour operators

Tour operators' operating revenue plummeted by 78.9% to $920 million, StatCan says.

“It was by far the largest decline among the travel arrangement industries because tour operators are very reliant on international travel,” the government agency says.

Since 2019, tour operators' operating revenue dropped by 89.9%.

In 2021, packaged tours generated 55.9% of all sales revenue, followed by group tours (19.5%), mainly to foreign destinations other than the United States.

Travellers pass through Toronto Pearson International Airport. (Pax Global Media/file photo)

Individuals and households in Canada (79.3%) were the main source of tour operator sales.

E-commerce, meanwhile, accounted for 38.1% of total sales.

Operating expenses decreased by 72.2%, falling to $1.3 billion. Cost of goods sold (60.5%) was the largest contributor to industry expenses, followed by salaries, wages, commissions and benefits (17.0%).

The operating profit margin for tour operators turned more negative, declining from -5.2% in 2020 to -38.9% in 2021.

Travel agencies

Travel agencies “did not fare much better,” StatCan says, as they generated $865 million in operating revenue in 2021, a 36.4% drop from 2020 and a 65.4% drop from 2019.

Airline seats (35.4%) claimed the largest share of sales revenue, followed by packaged tours (18.1%) and travel insurance products (11.3%), whose share of sales has more than tripled during the COVID-19 pandemic.

Most sales were to individuals and households (60.5%) or businesses (22.5%).

The domestic market was key in 2021, as sales to Canadian destinations accounted for 41.7% of the total, a notable increase from 25.7% in 2019.

E-commerce accounted for 30.0% of total sales in 2021.

Operating expenses were $1.1 billion, down by 28.3% from 2020. Salaries, wages, commissions and benefits (52.7%) contributed the most to industry expenses.

Others 

The operating revenue for other travel arrangement and reservation services was $1.7 billion in 2021, representing a 19.8% decline from 2020. T

his industry has held up better during both years of the pandemic, bringing its total decline from $3.1 billion in operating revenue in 2019 to a comparably more moderate -43.9%. 

The types of businesses in this industry include automobile clubs, ticket service companies and travel wholesalers, which benefitted from business activities that occurred domestically.


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