Tourists are returning to Toronto, but the industry still hasn't fully recovered from pandemic: report

The nearly nine million people who visited Toronto last year spent more than visitors did in pre-pandemic years, but a new report says the city's tourism industry is still in recovery.

Visitors spent about $7 billion in the city last year, according to a report on the visitor economy released Monday by Destination Toronto, which is the official marketing organization for the city's tourism industry. 

That's more than the $6.7 billion tourists spent in 2019, before COVID-19 pandemic lockdowns crippled the tourism industry.

But that dollar figure is slightly misleading, says Destination Toronto executive vice-president Andrew Weir.

"That increase that we see in spending, a lot of it is inflationary," Weir said. "The visitation hasn't fully rebounded yet."

The report finds that, despite recent progress, the city's tourism industry still has a way to go before fully recovering.

International visitors slow to return

The 8.95 million people who visited the city last year was less than the 9.56 million who visited in 2019, according to the report.

The report found that international visitor numbers are still far behind what they were pre-pandemic. For instance, the number of visitors from China — Toronto's largest overseas tourist market — was 24 per cent what it was before 2020, according to the report.

Frédéric Dimanche, director of Ted Rogers School of Hospitality and Tourism Management, said those numbers are consistent with international tourism numbers.

"To me, there is not much surprise," Dimanche said.

Dimanche says rising inflation, hefty consumer debt and uncertain international relations are all contributing to a slow return to international travel even though most pandemic restrictions have been lifted.

Across the world, the Middle East is the only region where the number of international tourist arrivals in 2023 exceeded 2019 arrivals, according to the United Nations' latest statistics.

Instead, domestic travel is making up far more of Toronto's tourist numbers than in pre-pandemic years, with the report finding 71 per cent of visitors last year came from within Canada.

Still, Weir says the main findings are positive.

"We're definitely on a recovery trajectory," he said.

Tourism starting to feel normal again: insiders

Jason Kucherawy, who runs a walking-tour business in Toronto, agrees that things have been getting better.

He says while the number of visitors hasn't recovered, he felt like 2023 was the first regular tourism season he'd seen in years.

"It felt as though we had kind of woken up from a dream that this pandemic had happened," he said. "I say a dream — more of a nightmare."

Kucherawy says he was happy to be guiding large tours through bustling crowds again, but business is still tough.

"We really need the help of Torontonians to get out and enjoy the attractions, to take walking tours and bicycle tours and food tours, and really get to know their city to make up for the shortfall that we're seeing in international visitors," he said.

The Destination Toronto report also found a slower return in demand for hotels and other tourist accommodations, as well as corporate meetings and conferences, as new communications technology make business travel less necessary.

Andrew Siegwart, CEO of the Tourism Industry Association of Ontario (TIAO), says debt is another challenge for many small businesses, as government loans given out during lockdowns come due.

Overall, he agrees the industry is on the upswing.

"We're definitely seeing those returns … which is really motivating for the industry," he said. 

"At the same time, I think it's giving us all in the industry time to assess some of the challenges that still remain and focus on them as a result. So things like the labour supply still not bouncing back, rising business costs, the increase in cost of living for consumers and housing."

TIAO reported in 2022 that the tourism industry likely wouldn't fully recover from the pandemic until 2025. Siegwart says the Destination Toronto report remains consistent with that prediction.