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Tourism outlook ‘pretty bleak’ for Northern outpost operators

With U. S. border closed, COVID-19 could create some small business casualties if no government assistance offered, says outfitters group
morning fisher
The closure of the Canada-U.S.border to leisure travellers and American anglers is having a severe fallout for northern lodge owners. (NOTO supplied photo)

With the Canada-U.S. border closed to non-essential traffic and a provincial emergency order forbidding leisure travel, outdoor tourism in Northern Ontario is already taking a massive hit.

Laurie Marcil, executive director of Nature and Outdoor Tourism Ontario (NOTO), wonders if many of her member businesses will survive to see 2021.

“They’re scared. They’re absolutely terrified,” said Marcil.

Clients are calling to cancel trips and want their deposits back.

“The cancellations are coming in loud and strong,” she said. “It’s pretty bleak.”

For many lodge operators, trip deposits are the only money they’ll generate for the year, most of it going into basic living expenses or being reinvested back into their businesses.

“They don’t have that money to give back," Marcil said.

Of NOTO’s database of 1,479 operators, 79 per cent are seasonal outdoor lodges, campgrounds and resorts.

“The first thing we’ll really miss out on is the spring bear hunt,” said Marcil.

A delayed start to the travel season brings forth a myriad of challenges to shuttered seasonal tourism businesses faced with chronic staffing issues and fixed costs associated with utilities, insurance premiums, and lease payments for rented boats and motors.

“Not knowing when they’ll be open, or if they’ll be open, this summer is really scary,” said Marcil.

“My focus is to help them weather the storm and survive all of this.”

She is advising lodge owners to ask their clientele to reschedule trips for later in the year or give partial refunds with the remainder being applied for a trip next year.

Even if travel restrictions loosen by July, Marcil realizes it might be difficult for lodge owners to lure seasonal staff back to work.

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The unfortunate timing of the COVID-19 outbreak occurred in the middle of the spring outdoor sports tourism season when many operators do their marketing and take bookings.

It’s a precarious existence for outfitters relying on a roughly four-month window, between May and the Labour Day weekend, to generate their annual income.

A recent survey in which NOTO participated, in conjunction with the Tourism Industry Association of Ontario (TIAO) in early April, indicates more than half of seasonal tourism businesses will be unable to open this summer.

“Even if things turned around, there’s no money to open right now. That’s super scary.”

Being able to salvage the season depends on opening the U.S. border, which Marcil doesn’t suspect will be happening any time soon.

Domestic travel might make up for the loss of American visitors in some parts of Ontario, but not for outfitters in northwestern Ontario where March was a total writeoff for lodge owners who rely almost exclusively on cross-border winter anglers.

“I know one outfitter who lost $40,000 alone in cancellations for ice fishing,” said Gerry Cariou, executive director of Ontario's Sunset Country Travel Association.

“March is one of the busiest, if not the busiest, time of the year.”

His marketing group represents 450 lodges between Thunder Bay and the Manitoba border, along with allied retail businesses and municipalities.

Cariou fully supports measures to contain the pandemic, but he said the tourism industry and government need to come up with a plan on how the economy will be reopened.

“It’s very dark in the industry. We have to have a safe return to some sort of normalcy.”

A big issue with operators, Cariou said, is the rollout of federal aid programs.

The emergency wage subsidies and business loans do not address the capital and personnel needs of these small, seasonal operators.

“We’ve come off a reasonably few good years, people have started to reinvest in capital projects and they may have bank debt related to those. I mean, how do you predict in business planning a coronavirus pandemic?”

Marcil added government assistance, specific to their needs, is desperately needed.

Many outfitters may not qualify for the wage subsidy and other backstop programs since they can’t demonstrate a financial loss – visitations don’t start until May – and she suspects lodge owners are reluctant to apply for the Canada Emergency Business Account loan program to take on additional debt.

“We just need immediate help. We need to make sure these businesses remain open because the tourism industry is going to be the first one that helps us get back on our feet.”

On the provincial lobbying side, NOTO is working with TIAO to amplify their voice to ensure the government understands the ramifications of neglecting these small businesses.

“We know that Destination Ontario, the agency that does marketing for Ontario, is ready with a recovery strategy aimed at the domestic travellers.

“We just have to make sure our outdoor products are here and that we’re ready to go.

“They’re (Queen’s Park) talking about recovery, and that’s great, and marketing is wonderful, but if you have nothing to market it doesn’t help anybody."

To provide some relief, NOTO wants the province to waive all Crown resource user fees for 2020 such as for bear management and land-use permits.

“The discussions are going okay. They haven’t said no, so we’re hopeful.”

She also warms to Saskatchewan’s $50-million aid package for small and medium-sized businesses that have been impacted by COVID-19.

The program provides a one-time grant to businesses ordered to close that’s based on 15 per cent of the businesses' monthly revenue up to $5,000.

On the federal end, her organization is drafting a letter to Ottawa with national organizations like the Tourism Industry Association of Canada, the Canadian Federation of Outfitter Associations, and the Canadian Federation of Independent Business, asking for help.

Though hopeful there won’t be any bankruptcies among her members, Marcil realizes that might be unavoidable.

"I hope with all my heart not, but I believe this is kind of situation we’re in. I believe there are some that are not going to be able to survive this."