Canada’s travel agencies recovering yet revenue remains low

Grant Hurrle believes that the future is bright for Forbes Travel after its recovery from the COVID-19 pandemic. He saw many business trips, which make up 70 per cent of his agency’s revenue, taking place again. 

“If we compare 2022 even with 2019, we were back on par with what we were prior to the pandemic. And we have probably remained steady or maybe even grown slightly in 2023.” 

However, that was not the case for Kanyapat Suwannaruang, the owner of Thai Vancouver Education & Travel. Even though the revenue of her agency has recovered, the number is not as high as it was before the pandemic. This prompted her to take action. 

“Other than Thai students, I have begun to target students from countries such as Indonesia, Vietnam, and South Korea,” said Suwannaruang. “I have also expanded my cruise lines because people most of the time still book it through travel agencies.” 

Despite this uneven picture for Canada’s tourism industry, recent statistics suggest that the majority of travel agencies share the same struggle as Suwannaruang. Although the operating revenue of travel agencies in Canada rose from $1.3 billion to $1.8 billion between 2020 and 2022, it was down 27.9 per cent compared with the pre-pandemic year of  2019.

The slow recovery in the revenue of Canada’s travel agencies can be explained by the strong impact of the COVID-19 pandemic and the size of Canada’s tourism industry, according to Frédéric Dimanche, the director of Ted Rogers School of Hospitality and Tourism Management at Toronto Metropolitan University. 

“As you know, an industry like this was so badly hurt by COVID-19,” he said. “When you have such a heavy industry, a very big industry, you cannot put it back on and switch on in just a week, a month, maybe even a year. It takes time to recover.”

Moreover, Dimanche attributed the slow rebound to the ongoing fear among people of the COVID-19 pandemic. Many are also unwilling to travel because they have seen difficulty in traveling in the last two years, especially in Canadian airports, due to the labour gap in the industry. The rapid growth in inflation is another problem that has increased the cost of traveling for people, said Dimanche. 

Moving forward, Canada’s travel agencies should continue to provide the best prices to their clients. This suggestion is made by Shew Chuck Tang, a customer who regularly uses a travel agency to travel from Canada back to Hong Kong. Price, according to a report, is indeed among their primary concerns when people use a travel agency. Another research also suggests that travellers usually opt for the easiest way of organizing their trips. Tang cited this as another reason that he uses a travel agency. 

“They compare the prices of different airlines for you, so you don’t need to do it yourself.” 

Dimanche adds that travel agencies should target the market that needs their services. Most complex trips with multiple destinations and requirements, for instance, still require assistance from travel specialists. Equally important is the way travel agencies communicate the added value they bring to their customers. 

“They have to demonstrate and they have to explain to the customers that they really bring added value to the service. They are not just selling a roundtrip ticket to some place. They are selling a whole set of services, including possibly some insurance and support, ” said Dimanche. “They have to be very careful about communicating that to the customer, so that it’s well understood.”