SARS to Cost Tourism $519M This Year

Report says virus could reduce tourism jobs by nearly 5,300 positions in 2003

July 9, 2003

OTTAWA (CP) — Even under a best-case scenario, the country's tourism industry will take a $519-million hit from SARS this year, the Canadian Tourism Commission says.

The revenue shortfall from a decline in both domestic and international travellers could hit $722 million by 2006 if outbreaks of the potentially fatal respiratory illness continue, the http://www.canadatourism.com commission says in a pair of reports released today.

In terms of jobs, the report says SARS could reduce tourism employment by nearly 5,300 positions this year, and 7,350 by 2006.

Under a worst-case scenario, fiscal shortfalls could hit $1.8 billion this year and $10.6 billion by 2006 if there is an extended outbreak of the disease, the commission said.

The two reports were conducted by PKF Consulting for the commission and the Ontario Tourism, Culture and Recreation Department.

The papers assess the impact of the Iraq war and SARS on the tourism industry in Canada. They were prepared in May and June, before a second outbreak of SARS gripped Toronto. There have been no new cases in over a month, but 39 Canadians have died from the disease.

The research found the Canadian accommodation industry got off to a good start with a 2.6 per cent increase in overnight demand in January and February. But levels declined by 1 per cent in March and fell sharply in April by over 11 per cent compared with 2002.

In April, the accommodation industry lost more than 662,000 occupied room nights through cancellations and an erosion in travel due largely to perceptions regarding SARS and, to a lesser extent, terrorism and the Iraq war, the commission said in a statement.

The room revenue loss to the Canadian accommodation industry in April compared with a year ago was estimated at $92 million — $60 million in the province of Ontario, with a $39 million loss for the greater Toronto area.

The impact on tourism-related taxes attributed to the best-case scenario was estimated to deduct $161 million from government revenues in 2003 and a total of $224 million from 2003 to 2006.

For the federal government alone, the corresponding tax shortfall for 2003 and cumulative 2003 to 2006 is estimated to be $88 million and $123 million, respectively.

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