TOURISM AND HOSPITALITY SECTOR IN TORONTO
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1 2012 TOURISM AND HOSPITALITY SECTOR IN TORONTO Toronto Workforce Innovation Group
2 About the Toronto Workforce Innovation Group The Toronto Workforce Innovation Group conducts research, disseminates information and convenes stakeholders to address workforce development trends, gaps and opportunities in Toronto. Our multi-stakeholder approach is unique; we work on issues across many sectors and engage stakeholders from a variety of perspectives. Our research is an ongoing and continuous process, which includes On Topic, our monthly electronic bulletin. 215 Spadina Avenue, Suite # 350 Toronto Ontario M5T 2C info@workforceinnovation.ca This research is put together by Enriketa Dushi and Leon Suria 1 P a g e
3 An Overview Tourism in Toronto is an industry that plays an important role in the city s economy; generating employment, foreign exchange earnings, investment and regional development. Key Characteristics of the sector include: $4.35 billion in total spending by visitors $1.08 billion in total taxes generated by visitor spending Over 24,000 tourism related businesses employing 224,000 people. In 2010, the Toronto region welcomed 9.9 million overnight visitors, an increase of over 3% from In 2010, 574,000 room nights were booked for future meetings and conventions from 2011 through Toronto had the 6th highest hotel occupancy rate (68.3%) among major North American cities in 2010, up from 10th place in In 2010 a record 8.9 million room nights were sold throughout the year The number of overseas visitors increased by 11% in 2010, making it the most rapidly expanding market segment. Brazil (59%), India (28%), South Korea (26%) and China (26%) were the fastest growing markets. Toronto benefits from three major types of travellers pleasure, business and visiting friends and relatives with spending by the three types in nearly equal proportion Canadians are the largest geographic group of Toronto s overnight visitors, 6.6 million visitors in Accommodation and Food Services Labour Force Accommodation as well as food and beverage services are large, fast growing sectors on the tourism industry in Toronto. Between 2005 and 2011, employment in these services experienced growth of 3.2% in Toronto CMA. In the last five years employment in Accommodation sector increased by 57.4% for the age group and 74.4% for the age group. 1 Tourism Toronto - Market Report P a g e
4 Accomodation Services Employment by Age Group Toronto CMA Source: Statistics Canada, Labour Force Survey Immigrants are an important source of labour for tourism industries in the Toronto CMA, holding 27.3% of jobs. Tourism skills are transferable around the world. Depending on the nature of the job, work may be part-time or full-time. Individuals with skills that are applicable to several occupations increase their chances of finding full-time, full-year 2 employment. Future growth is predicted in relation to: Woodbine Live expected to create approximately 8,000 construction jobs and over 10,000 permanent jobs on completion Pan Am Games expected to create 15,000 construction-related jobs. A total of 526,554 hotel rooms are booked for future business travel, convention and meetings bookings including o Microsoft Worldwide Partner Conference in 2012 with over 15,000 participants from 130 countries and more than 500 events o Rotary International in 2018, with 20,000 attendees o American Academy of Neurology in 2020 o International Confederation of Midwives in Toronto Workforce Innovation Group TOP Report Tourism Toronto Market Report P a g e
5 Profile of Number of Visitors and Spending In 2010, same day visitors were the majority of visitors to Toronto (61%), while overnight visitors make up the majority of visitor spending (77%). These visitors are mostly from Canada, followed by the USA and then overseas. 4 Table 1.0 Visitors: Same-day and visitors (2010) Visitors Visitor Spending 23% 39% 61% 77% Same day Overnight Same-day Overnight Source: Tourism Toronto Table 1.1 Overnight Visitors by Origin (2010) 14% Table 1.2 Visitor Spending by Origin (2010) 28% 20% 44% 66% 28% Canada USA Overseas Canada USA Overseas 4 Tourism Toronto Market Report P a g e
6 Table 1.3 Overnight Visitors by Trip Purpose (2010) Table 1.4 Visitor Spending by Trip Purpose (2010) 6% 30% Pleasure Business 29% 6% 33% Pleasure Business 47% 17% Visit Friends / Relatives Other Visit Friends / Relatives Other 32% Source: Tourism Toronto Demographic Trends of Overseas Visitors (2010) The number of overseas visitors increased by 11% in 2010, making this the most rapidly expanding market segment. The UK leads the overseas visitor as the number one in the number of visitors and visitor spending category. Brazil (59%), India (28%), South Korea (26%) and China (26%) were the fastest growing markets. 5 Toronto Hotel Industry Outlook The Toronto Hotel industry outlook is projecting a better performance in 2012 as compared to 2011, in almost every category, with the exception of overseas overnight travel. Table 1.5 GTA Economic & Travel Indicators forecast 2012 projection GDP growth 3.0% 2.8% 3.5% Business Travel Overnight Domestic (7.9%) 2.8% 2.7% Pleasure Travel Overnight Domestic (4.9%) 0.5% 2.0% U.S. Overnight Travel (2.4%) (1.9%) (0.8%) Overseas Overnight Travel 0.3% 4.3% 3.2% Total Overnight Travel (1.0%) 0.4% 1.5% Source: PKF Consulting Inc. 5 Tourism Toronto Market Report P a g e
7 Toronto s accommodation supply and accommodation demand are expected to increase in the year 2012, but more slowly than the previous year. Room supply is predicted to increase in 2012 from 42,900 to 43,800. Table 2 GTA Market Outlooks Overall forecast 2012 projected Total GTA Rooms 41,546 42,856 43,776 Occupancy 66% 67% 67% Average Daily Rate $127 $129 $133 Revenue per available room (Revpar) $84 $86 $89 Source: PKF Consulting Inc. Downtown Toronto had and is projected to have the highest net income per available room. Table 3 Toronto Hotel Industry Financial Outlook Net income per available room ($000 s) forecast 2012 projected National $9.1 $9.1 $9.7 Central Canada $7.4 $7.6 $8.1 GTA $9.4 $9.7 $9.9 Downtown Toronto $12.8 $12.5 $13.0 Source: PKF Consulting Inc. Toronto s Tourism Labour Market Forecast: Between 2007 and 2025, demand for tourism workers in Toronto could rise from 253,161 fullyear jobs to 367,800 full year jobs, a potential increase of 45 per cent. Between 2007 and 2025, potential labour supply in the tourism sector is forecast to rise 30 per cent in Toronto (from 250,295 jobs to 325,799jobs). Projections for potential labour shortages in the tourism sector indicate that Toronto s supply of labour could fall short of potential demand by just over 42,000 full year jobs. 6 6 The Canadian Tourism Research Institute / the Conference Board of Canada The Future of Canada s Tourism Sector 6 P a g e
8 Bibliography: PKF Consulting Inc."PKF Outlook for the Canadian Lodging Sector 2011/2012.". PKF Consulting Inc., October 13, Web. 12 Jun < PKF Outlook GTHA Oct 13th.pdf>. The Canadian Tourism Research Institute / the Conference Board of Canada. "The Future of Canada's Tourism Sector: Economic Recession Only a Temporary Reprieve From Labour Shortages". The Canadian Tourism Research Institute / The Conference Board of Canada, February Web. 12 Jun < mation/supply_demand/supplydemand_2010_ ReportEN.ash&xgt;. Toronto Workforce Innovation Group. "TOP Report - Local Labour Market Update 2012". Toronto Workforce Innovation Group, Web. 12 Jun < Final.pdf Tourism Toronto. "Tourism Toronto - Toronto Convention & Visitors Association." Tourism in Toronto The Year in Review. Tourism Toronto, June Web. 12 Jun < 34cd1a392e17/Market-report-2010-final-(1).pdf.asp&xgt; Tourism Toronto. "What's New in Toronto, Canada - Winter/Spring 2012.". Tourism Toronto, January 30, Web. 12 Jun < 7 P a g e
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