Thursday,  February 25, 2021  4:55 pm

Travel agencies, tour operators saw revenue increases in 2019: StatCan


Travel agencies, tour operators saw revenue increases in 2019: StatCan

It feels like 100 years, but it was just barely a year ago: travel agencies and tour operators saw significant growth in 2019, according to Statistics Canada.

The government agency, on Dec. 9, 2020, released its annual report, which it calls "the travel arrangement and reservation services industry group" (this is you!) for the year 2019. 

It appears that the operating revenues of this group amounted to $14.5 billion in 2019, up 4.4% from the previous year.

“This was a marked improvement over the previous year's decline of 0.1%,” said StatCan.

Ontario (48.0%) was responsible for the largest share of revenues posted in 2019, followed by Quebec (24.3%) and British Columbia (15.9%).

"A summit for some time"

"The 2019 figures will inevitably set a high water mark for the near future, as all travel-related industries have been hit hard by the COVID-19 pandemic and its related restrictions on non-essential travel to Canada and border closures," says StatCan.

The federal agency recalls that the number of foreign travellers to Canada from the United States and overseas countries decreased by 95.3% in September 2020 compared to September 2019 and that trips by Canadians to foreign countries posted similar declines .

“While COVID-19 restrictions were eased over the summer in several areas of the country and domestic travel was possible, the travel arrangement and reservation services industry group remained strongly affected. Advisories against non-essential travel are still in effect, and several areas of the country are grappling with a resurgence of the pandemic.Income: 2019, a good year for tour operators," the agency said. 

According to StatCan, tour operators (62.2%) generated the largest share of the group's revenues in 2019. 

That year, they saw their operating revenues increase by 3.9% to reach $9 billion. 

“Along with the increase in the number of tourists in Canada, tour operators also benefited from a 3.2% increase in the number of Canadians travelling to countries other than the United States, as they are more likely to use services from tour operators," says StatCan.

Packaged tours (63.7%) generated most of the sales, followed by group tours (21.7%), mainly to foreign destinations other than the United States. 

Individuals and households in Canada (81.6%) were the main source of tour operator sales, followed by clients outside Canada (13.7%).

An even better year for agencies!

Travel agency operating revenues amounted to $ 2.4 billion in 2019, up 6.4% from the previous year (versus + 3.9% for tour operators, remember) .

According to StatCan, like tour operators, agencies have taken advantage of the growing number of Canadians who have travelled to countries other than the United States. 

In addition, they have benefited from a "growth in online sales, which has allowed some Canadian firms to sell travel services to a broader market."

In 2019, airline ticket sales (35.9%) accounted for the largest share of travel agency revenues, followed by package tours (23.8%) and cruises (8%).

Most sales were made to individuals and households (58%) and businesses (24.1%) in Canada.

By destination, travel agencies generated the highest portion of revenue from package travel and cruise packages to international destinations other than the United States (32.6%).

Expenses in 2019

In 2019, the operating expenses of tour operators increased by 5.4%. Cost of goods sold (85.1%) was the group's largest expense, followed by salaries, wages, commissions and benefits (5.4%).

For agencies, operating expenses amounted to $ 2.2 billion in 2019, up 7.7% from 2018. Salaries, wages, commissions and benefits (49.2%) were was the source of the majority of industry spending, followed by advertising, marketing, promotions, meals and entertainment (11.8%).

Profit margin

The operating profit margin for tour operators was 0.8% last year, down from 2.2% in the previous year.

As for the profit margin of travel agencies, it decreased from 11.9% in 2018 to 10.9% in 2019.

Electronic commerce

Among tour operators, e-commerce accounted for 26.3% of total sales recorded in 2019, and 37.6% of shopping locations reported e-commerce sales.

Among businesses that made e-commerce sales, 93.5% of locations offered the option of shopping through their business website.

Third-party websites (74.2%) and mobile apps (17.3%) were the other most popular e-commerce methods offered to shoppers.

On the travel agency side, e-commerce represented 29.9% of total sales made in 2019; 41.2% of shopping locations reported e-commerce sales.

Among businesses that made e-commerce sales, 94.7% of locations offered the option of shopping through their business website.

Third-party websites (56.9%) and mobile apps (21.4%) were the other most popular e-commerce methods offered to shoppers.

Indicator...