It doesn’t happen often, but every once in a while a federal government agency publishes very good news indeed.
According to figures from Stats Canada, Canadian travel agencies broke revenue records in 2023 – surpassing even the pre-pandemic years.
Travel agencies had the strongest recovery of all three travel industries, with operating revenues in 2023 exceeding pre-pandemic levels by 11.6%.
Operating revenue of the entire industry rose 53.5%, to a record high of $15.2 billion, Stats Can said. And it was almost 4% higher than in 2019 – the year before the pandemic took hold in Canada.
“While the travel industry took a hit in recent years due to travel restrictions related to the COVID-19 pandemic, business in this industry has bounced back to the pre-pandemic norm,” the agency reported on 01OCT.
Stats Can measured revenues among travel arrangement and reservation services based in Canada. This group includes tour operators, travel agencies, and all other travel arrangement and reservation services not falling into the first two categories.
Total operating revenue for travel agencies reached $2.8 billion in 2023, a 55.5% year-over-year increase, the report stated. Of course, operating expenses also rose -- 46.6% year over year to $2.4 billion in 2023. Salaries, wages, commissions and benefits accounted for the largest share (51.3%) of those expenses.
The profit margin for travel agencies reached 14.8% -- the highest in more than a decade.
“Travel agencies and tour operators faced large losses because of pandemic-related restrictions, with many firms going out of business, leaving only the more profitable firms standing,” according to Stats Can.
Tour operators, who turned a profit for the first time since the pandemic, grabbed almost 60% of total revenues in this group, at more than $9 billion.
Then there’s the “other” category of travel booking –- auto clubs and domestic travel wholesalers. These businesses never lost profitability during the pandemic, according to the report, but still grew in 2023, with operating revenues increasing more than 20% year over year to $3.3 billion in 2023. This group also had a lower profit margin than travel agencies, at 4.5%.
