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Alberta, Our Hospitality Industry Needs Our Help

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John Liston.

We Albertans are known for our hospitality. We love to host our friends and neighbours for a meal or visit. As we open up our province and businesses, it is time we got out for dinner or travelled to a destination across this great province to enjoy an Alberta vacation.

 

Alberta’s Restaurant & Food Service Industry

Prior to COVID-19, Alberta’s $12 billion restaurant industry represented 3.4 per cent of the province’s GDP and was already a highly competitive, labour-intensive, low margin industry with average pre-tax profitability of less than 5 per cent. In 2019 the industry was the third largest private sector employer and largest youth employer directly employing a peak of more than 150,000 Albertans just before COVID (including 60,000 young people under the age of 25) representing 6.5 per cent of the province’s workforce. Before COVID-19 the industry included more than 11,000 small businesses in every Alberta community.

The restaurant and food service industry brings jobs, investment, innovation and tourism to every community in the province while creating a focal point for people to gather. Restaurants, cafeterias, coffee shops and bars are gathering spots for people from all walks of life and operators are proud to serve as a social club for seniors, the sponsor of the local hockey or sports team, the boardroom of small business, or a meeting place for community groups.

As a result of COVID-19 all segments of Alberta restaurants experienced significant sales losses resulting in a 24.4 per cent decline in commercial restaurant sales compared to 2019. Of the four segments of the industry (full service restaurants, quick service restaurants, caterers and drinking establishments) full service restaurants and drinking establishments experienced the steepest loss in monthly sales. As a result, over the past year more than 1,000 Alberta restaurants have closed permanently. Restaurants Canada predicts that Alberta’s restaurant industry will not generate sales equivalent to 2019 sales until 2023.

 

Alberta’s Hotel Industry

The hotel industry suffered similar challenges through the same period. Prior to COVID-19 the economic impact analysis for Alberta’s hotel industry showed industry revenue at $3.4 billion with $3.1 billion value added revenue and employing 36,000 people.

In the first month of COVID-19 approximately 60 per cent of hotel rooms in Alberta were closed and 90 per cent of staff were temporarily laid off. Occupancy fell 55 per cent year over year and the average daily rate dropped close to 20 per cent.

Alberta’s hotel sector is currently on life support dependent on several of the government subsidy programs. This will not be a quick fix and the industry is telling us that they will need to have extended liquidity support well beyond the current wind down of federal support programs. The industry also needs the removal of interprovincial and international travel restrictions to attract travelers beyond our borders. CBRE hotels estimates the Canadian hotel sector will not return to 2019 revenue levels until 2025.

Restaurants and hotels need our help. They have been huge contributors to both the economic and cultural diversity of Alberta and we owe it to them to get back out and enjoy our communities across the province. Not to mention, after 16 months I suspect we’re all sick of our own beds and cooking.

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