While the head of the Tourism Industry Association of Canada warns that businesses are struggling to stay afloat under a pile of debt and a lack of overseas visitors, at least one local tourism operator seems to be bucking the trend.
According to a survey of tourism operators conducted by Nanos, a lack of tourists from abroad as compared to 2019 is one reason for the industry’s woes. In March, the combined number of visitors to Canada and returning residents was 77 per cent of March 2019 levels, according to recent figures from Statistics Canada.
Beth Potter, CEO of the tourism association, said Americans, for example, have “cocooned within their own country,” adding that she remains hopeful they will return in force soon.
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The owner of Ottawa’s Escape Bicycle Tours and Rentals, Maria Rasouli, said she has not seen the uptick in international travellers she was hoping for.
During the pandemic, Rasouli was able to bring in a bit of money from renting out her bikes, although in 2020 her overall revenues skidded 95 per cent without an influx of tourists. Now, she is still awaiting the “surge” in travellers that she relies on.
“Overall, the season has been very slow, especially for outdoor activities, with the wildfire and smoke to add to the complexity,” Rasouli said. “I am hoping things will be better in July and August.”
Meanwhile, for Mike Karpishka, co-owner of Ottawa’s Palapa Tours, business is booming. Palapa offers boat cruises on licensed “tiki” boats and, with sold-out Saturdays and bookings for events and corporate parties, Karpishka said he expects this summer to be his busiest yet.
By marketing to locals and domestic tourists, Karpishka said Palapa has avoided relying too much on international travel.
“We’re in a really unique position, so we don’t simply cater to the tourists,” he explained. “A lot of locals come back as repeat customers and become tourists in their own city.”
Karpishka and co-owner Gaby Saucedo have big plans for Palapa, including expanding into Cancun and Oaxaca, Mexico. They’ve already sold $10,000 in pre-bookings for a new location in Toronto that opens in two weeks, Karpishka said. This year, he anticipates that Palapa will make $600,000 in sales, up 10 per cent from last year.
“We’re really grinding the marketing hard,” he said. “We’re not sitting back.”
Palapa Tours got its start during the pandemic, so Karpishka planned accordingly. As a result, he said Palapa Tours has emerged debt-free.
However, many other tourism operators are struggling to repay pandemic loans under programs such as the Canada Emergency Business Account (CEBA) as well as the Regional Relief and Recovery Fund and the Highly Affected Sectors Credit Availability Program.
In the Nanos poll, some 45 per cent of operators said they were likely or somewhat likely to shut down within three years unless the government steps in to adjust their loan conditions.
“Unless there’s some change to the payback system and the payback requirements, they’re in danger of closing in the next three years,” said Potter. “Everything from campgrounds to hotels to amusement parks to outdoor adventure.”
The tourism association is calling on the federal government to extend the zero-interest repayment deadline for CEBA loans to Dec. 31, 2025, two years past the current deadline.
It is also asking Ottawa to boost the forgivable portion of fully repaid loans to 50 per cent, from up to 33 per cent, and to extend the qualifying deadline for that forgiveness to the end of 2024, rather than by the end of this year.
After several program extensions and top-ups, the government says on its CEBA website that all “repayment deadlines are now final and cannot be changed.”
The CEBA program funded more than 898,000 small businesses and not-for-profits with $49.2 billion in interest-free loans of up to $60,000 after the COVID-19 pandemic set in, according to the government.
Conducted by Nanos, the online survey polled 149 financial controllers and accountants of businesses in the tourism sector between April 28 and May 12.
With files from The Canadian Press
