Yes, festivals are back – but Ottawa’s tourism sector ‘not out of the woods,’ industry leaders say

Ottawa skyline from river
Ottawa skyline from river

By Irem Koca

The return of events like Bluesfest and in-person Canada Day celebrations has triggered a mini-renaissance for Ottawa tourism businesses this summer – but industry leaders caution the local sector isn’t out of the woods yet.

After a devastating two-year stretch in which visits to the city virtually ground to a halt during the pandemic, Ottawa has seen the tourism industry slowly come back to life in the summer of 2022.

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Thanks to the revival of events like Bluesfest as well as measures such as Ontario’s “staycation” tax credit and Ottawa Tourism’s “third night on us” promotion, those who promote the nation’s capital to outside visitors say they’re beginning to see some light at the end of what’s been a long, dark tunnel.

“Summer has been good for leisure travel, and we’re headed in the right direction,” says Jantine Van Kregten, director of communications for Ottawa Tourism.

For example, the city-funded agency’s “third night on us” deal – which offers travellers a free night’s stay when they book two consecutive nights at participating hotels and runs until Oct. 10 – has been a hit, Van Kregten says.

She says the Ontario government’s staycation tax credit, a $270-million initiative that allows provincial residents to claim up to 20 per cent of their accommodation expenses on trips within the province in 2022, has also helped boost visitor traffic and provided a much-needed shot in the arm to retailers and other tourism-related businesses.

Hotel occupancy still down

Still, Van Kregten cautions that the industry still has a long road ahead before it’s back at full strength.

For example, while the city’s hotel occupancy rate last month was 42 per cent higher than in 2021 and 130 per cent higher than two years ago, it remained below pre-pandemic levels of 2019, Ottawa Tourism says.

“It would be false to say that we’re out of the woods,” Van Kregten notes.

Ottawa Gatineau Hotel Association president Steve Ball, whose organization represents 65 properties with a total of about 10,000 rooms, agrees. 

“Does the fall look strong? No. Was the first quarter a disaster? Yes.”

“Does the fall look strong? No. Was the first quarter a disaster? Yes,” he says flatly. 

Ball says there is widespread concern across the industry about the long-term impact to tourism businesses if federal government workers don’t return to the office soon. 

Tour groups, conventions and business travellers constitute a significant chunk of tourism-related spending in Ottawa, the veteran industry executive notes. 

Yet those groups haven’t resumed pre-pandemic levels of activity to the same extent as leisure travellers, he explains, mainly because the federal government, the largest driver of tourism in the city, still has most of its employees working remotely. 

Rising inflation that has driven up costs of everything from gas to eating out in restaurants has also deterred domestic travellers, observers say. 

Meanwhile, international visitors are being turned off by random COVID testing at airports, the much-maligned ArriveCAN app, flight delays and non-compensated cancellations, they argue. According to Ball, Ottawa is particularly “lagging behind” markets like Montreal, Toronto and Vancouver that have more international flights. 

Massive financial blow

Local real estate executive Ashley Hopkins, who is a member of the ByWard Market BIA’s board of directors, says economic activity in the bustling downtown entertainment hub is “by no means” back to pre-pandemic levels. 

For BIAs, business travellers and conference-goers often provide a mid-week boost for retailers, services and restaurants in hot spots like the Market, and Hopkins says businesses are hoping those groups return sooner rather than later.

Indeed, the pandemic has dealt a massive financial blow to the tourism industry.

Pre-pandemic, visitor spending contributed $1.2 billion per year to the local economy. Ottawa Tourism estimates that from the beginning of the pandemic to the end of 2022, the nation’s capital will have lost $3 billion in visitor spending. 

Meanwhile, the accumulated debt that tourism businesses have racked up over the past two-plus years is also taking its toll on the industry, insiders say. The Trucker Convoy protests earlier this year did not help the situation either.

“The early months of 2022 were brutal, with lockdowns and the convoy occupation,” says Van Kregten. Ball says his organization calculated that at least $18 million worth of hotel bookings were cancelled due to the convoy protests alone. 

And even once the industry does start firing on all cylinders, tourism leaders say, another big stumbling block looms – a severe labour shortage.

Ball estimates Ottawa’s hotel industry currently has about 400 vacant positions, meaning many properties might not be able to operate at full capacity once guests start returning in greater numbers. 

The lack of staff has a spillover effect to other businesses, Van Kregten adds. 

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