Staycation boom could revitalize domestic tourism as pandemic persists

Click to play video: 'COVID-19: Staycation tax credit in Ontario looks to kickstart tourism industry'
COVID-19: Staycation tax credit in Ontario looks to kickstart tourism industry
WATCH: The coronavirus pandemic has changed the way Canadians travel, with restrictions forcing many to stay local for their vacations. In Ontario, a new staycation tax credit program is even incentivizing a holiday closer to home. As Anne Gaviola reports, the program is seen as much-needed help for the hospitality sector – Jan 23, 2022

Like many Canadians in 2019, Toronto resident Daniela Renda was looking forward to a new year filled with fun travel, including a planned trip to Italy and France with her family.

Of course, we know how that story went — the onset of the COVID-19 pandemic in March 2020 derailed international and even cross-border travel plans for most Canadians.

“It was devastating, because I didn’t want to spend another summer in Toronto. I wanted to get out of the city. But you know, a pandemic changes things,” Renda recalls.

Heading into 2022, even with the Omicron wave swirling and an uncertain year of possible pandemic surges ahead, Renda’s travel plans have adjusted course, and she’s looking forward to getting away in her home province.

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Rather than booking villas in Italy, she’s got 10 days set this summer at a cottage she visited this past winter in the Kawarthas, followed by a wine tour in Ontario’s Niagara-on-the-Lake.

“If I can’t taste wine in Tuscany, I can do it right here in Ontario,” Renda says.

Daniela Renda (front) with friends on a recent winter cottage getaway in Selwyn, Ont. Provided

Staycations offer local escape

The convenience and security of staycations, as local trips have been dubbed, are being pegged by industry leaders as a possible lifeline to support Canada’s hospitality sector after nearly two years of rotating lockdowns, travel restrictions and a general anxiety around international travel. But some are warning local business won’t be enough to sustain the industry long term.

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Staycations are increasingly attractive to Canadians like Renda who might be worried about COVID-19 protocols and the pandemic situation abroad in 2022.

“You don’t have to worry about converting money. You can do a lot of short weekend trips instead of longer trips. And I just feel safer staying in Ontario right now as opposed to getting on a plane, doing all those COVID tests,” she says.

“What happens if you get COVID on your second day of vacation? That’s definitely not going to be fun.”

Google trends show searches for the word “staycation” peaked in Canada during the first week of January 2022 when compared across the extent of the pandemic.

In Ontario, the government unveiled a staycation tax credit for 2022 that will give residents the chance to reimburse 20 per cent of the cost of their stay at in-province accommodations.

The Ontario government expects the program will cost $270 million and hopes the incentive will kickstart an industry that has struggled during the pandemic.

Similar programs in other Canadian provinces, such as a two-week incentive in Manitoba this past summer, have shown signs of early success.

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Click to play video: 'Ontario government offering incentives for local travel'
Ontario government offering incentives for local travel

Chris Bloore, the president of the Tourism Industry Association of Ontario, says constraints on international and cross-border travel have been a hard blow to most of his members. Some tourism operators along the U.S. border have seen revenues decline as much as 90 per cent without support from American tourists.

The Niagara region, for example, has lost an estimated $4 billion in gross domestic product since the onset of the pandemic, he says.

On the whole, Canada’s tourism sector saw a 53 per cent decline in GDP during the first year of the pandemic, according to data from the World Travel and Tourism Council. While contributions from international travellers collapsed due to COVID-19, domestic tourism spending was also cut in half in 2020.

Experts say the need for local support in the tourism industry is paramount heading into a third year of the pandemic.

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“American travellers and international travellers have a huge bearing on our industry in very specific areas,” Bloore says, citing major cities like Toronto and Ottawa.

“Domestic tourism is really going to have to fill a gap in the meantime.”

Small towns reap rewards of local tourism

But if there’s been a silver lining to the pandemic’s tourism impact, it’s been increased attention to rural and small-town destinations as a chance to escape crowds and spend time outdoors.

Data provided to Global News from Airbnb shows that Bancroft-Madawaska, near Algonquin Provincial Park in Ontario, was a top destination for U.S. and Canadian bookers in the summer of 2021. One in five Airbnb hosts in Canada owns a rural property, the rental platform says.

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One of these “unearthed jewels,” as Bloore calls them, is Prince Edward County, which includes the town of Picton, Ont. 

Niall McCotter, director of operations for The Royal Hotel in Picton, is banking on staycationers to give the hotel a long-awaited fresh start.

The heritage property has been under renovation for the past five years and finally opened its doors with a soft launch a few weeks ago.

The interior of The Royal Hotel in Picton, Ont. was gutted as part of a five-year renovation. Photo by Graydon Herriott

So far, the “vast majority” of bookings for the Royal in 2022 are from people within a three-hour radius, McCotter says, with Ottawa, Toronto, Kingston and even Montreal acting as “big feeders” for the burgeoning abode.

The Royal Hotel itself, written off as a wreck by many until new owners stepped in to restore it, might be an example of the untapped potential that the pandemic has revealed in local tourism markets.

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McCotter says the pandemic has brought attention to what Ontario and Canada have to offer. “I think hopefully there’s been that kind of that long-term shift where you will look close to you, close to home, as much as you look far away.”

Ontario has world-class destinations in its backyard, McCotter says. The pandemic has been shining a light on the potential, so what has been a “tragic, awful time for our industry has been kind of that blessing in disguise.”

The renovated interior of The Royal Hotel in Picton, Ont. Photography by Graydon Herriott

Staycations not enough to salvage the industry

McCotter says that while the local market is the Royal’s first priority, hotel management has aspirations to eventually attract international visitors to the small Ontario town.

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Tony Elenis, head of the Ontario Restaurant Hotel and Motel Association, tells Global News that his members will need visitors from beyond Canada’s border to return before the hospitality sector can fully recover from the impact of the pandemic, a phenomenon both he and Bloore forecast could be two years away.

“The staycation is positive, but not enough to support sustainment of the industry,” he says.

While government support has been critical to date, Elenis says hospitality operators need more cash injections to help cover rising expenses related to inflation and payroll.

Lisa MacLeod, Ontario’s minister in charge of tourism, says that the staycation tax credit is “time-limited” for 2022 only, but that the province is working with the federal government and regional tourism bodies on “stackable incentives” that could see other players in the tourism industry supported.

“We believe that with (the tax credit), they’ll be spending obviously for gas, they’ll be spending money at restaurants and of course, in some of our cultural attractions,” she says.

Industry 'ready to go'

MacLeod says the incentive is just one signal the province believes tourism will be safe again in 2022. The Ontario government unveiled plans Thursday to gradually lift Ontario’s restrictions tied to the Omicron wave. The province’s chief medical officer of health, Dr. Kieran Moore, signed off on the reopening plan, and MacLeod says that should make Ontarians feel safe about taking a staycation in the province.

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Bloore agrees.

“That’s really good news for our industry because it’s saying we’re open and we’re ready to go.”

While Renda says the time away from her favourite international destinations has been tough to swallow, she also says that an eventual return to global travel will be that much sweeter when the pandemic is firmly in the rear-view mirror.

In the meantime, she says the pandemic has presented a great chance to “discover where you’re from” and focus on the other things that make travel worthwhile.

“It doesn’t matter where you are. If the company’s really great, you can be on the hillsides of Tuscany or a bistro in Paris or just up at the cottage in Ontario, and it’s all going to be a good time anyways,” she says.

— With files from Global News’ Anne Gaviola

Click to play video: 'Travel Best Bets: Travelling during Omicron'
Travel Best Bets: Travelling during Omicron

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