Canadian Occupational Projection System (COPS)

Industrial Summary

Accommodation Services

NAICS 7211; 7212; 7213

This industry comprises establishments primarily engaged in providing short-term lodging to travellers and vacationers in facilities such as hotels, resorts, motels, bed and breakfast homes, and cottages and cabins. These establishments may offer complementary services, such as food and beverages, recreational services, conference rooms and convention services, laundry and parking services. The industry also includes establishments operating recreational vehicle (RV) parks and campgrounds (including hunting and fishing camps); and establishments operating rooming and boarding houses, which may serve as a principal residence for the period of occupancy. Traveller accommodation is by far the largest of the three segments, accounting for 88% of employment in 2016, followed by RV parks and recreational camps (11%), and rooming and boarding houses (1%). The 4-digit NAICS breakdown for GDP is not available. Overall, the industry employed 193,000 workers in 2016, mostly concentrated in Ontario (32%), Quebec (23%), British Columbia (16%) and Alberta (13%), with women accounting for the majority of the workforce (60%). The industry is also characterized by much lower wages than the national average and a significant proportion of part-time workers (24%). Key occupations (4-digit NOC) include:

  • Light duty cleaners (6731)
  • Hotel front desk clerks (6525)
  • Accommodation service managers (0632)
  • Janitors, caretakers and building superintendents (6733)
  • Accommodation, travel, tourism and related services supervisors (6313)
  • Executive housekeepers (6312);
  • Support occupations in accommodation, travel and facilities set-up services (6721)

* Also include many occupations related to the food services industry:

  • Food and beverage servers (6513)
  • Cooks (6322)
  • Food counter attendants, kitchen helpers and related support occupations (6711)
  • Chefs (6321)
  • Bartenders (6512)
  • Maîtres d'hôtel and hosts/hostesses (6511)

Accommodation services are heavily reliant on tourism activity and business travel, which in turn are driven by consumer spending and business activity, both from the domestic and foreign sides (domestic tourism accounts for about two-thirds of revenues). Consequently, the industry is particularly sensitive to fluctuations in domestic and foreign economic conditions, travelling costs, and the value of the Canadian dollar. After being negatively affected by the global recession of 2008-2009, output in the industry quickly recovered in 2010 and increased continuously in the following six years, with the exception of a temporary decline in 2015 that was fully reversed in 2016. Despite constant increases in output, the pace of growth was relatively modest, averaging 0.9% annually over the period 2007-2016. The expansion of the industry was restrained by a number of factors limiting tourism activity in Canada, including the post 9/11 passport requirements for re-entry into the United States and the strong appreciation of the Canadian dollar prior to 2013. More recently, lower fuel costs and the sharp depreciation of the Canadian dollar have contributed to improve tourism activity and increase domestic and foreign demand for accommodation services. Indeed, lower fuel costs have resulted in lower air and ground transportation fares, while a lower currency has attracted a large number of foreign tourists to Canada, particularly Americans, and encouraged more Canadians to choose vacation within the country. However, growing competition from sharing economy services such as Airbnb and HomeAway, which enable people to list, find and rent vacation homes through digital platforms, have captured an increasing part of the accommodation market. After reaching a peak in 2011, employment in the industry fell markedly and almost continously in the following five years, resulting in anemic growth (0.0%) for the whole period 2007-2016. Technological innovations, such as online hotel bookings, have played an important role in reducing labour demand and increasing productivity. High labour turnover in the industry also suggests difficulties in retaining and attracting workers due to the seasonal nature of its activities and much lower wages relative to other industries. Average weekly earnings are 40% lower than the average for the entire service sector, implying that external job prospects are often more desirable.

Over the projection period, output growth in the industry is expected to accelerate significantly relative to the period 2007-2016, primarily driven by a more positive outlook for tourism activity and business travel. Lower transportation costs, a favourable currency situation, and robust labour markets in the United States and Canada have increased tourism activity in the country in recent years and this situation is expected to persist over the short- to medium-term. The celebrations related to the 150th anniversary of the Canadian Confederation and the 375th anniversary of Montreal, combined with the fact Canada was named best travel destination by Lonely Planet and the New York Times, are expected to boost domestic and foreign demand for accommodation services in 2017. Tourism activity is also expected to rise in line with higher incomes in emerging markets, particularly in China and India. The number of visitors from China has more than doubled in the past five years and this country now ranks third behind the United States and the United Kingdom as a source of visitors to Canada. Furthermore, a stronger U.S. economy and increased business activity and corporate profitability in Canada are expected to stimulate spending on business travel. The growing interconnectedness of the global economy and incoming trade deals such as the Comprehensive Economic Trade Agreement (CETA) with the European Union are also expected to increase international business travel and demand for accommodaton services. The industry may also benefit from massive retirements of baby-boomers from the labour market, as this large and relatively well-off demographic group will have more time to spend on tourism activities. Baby-boomers are expected to inherit $750 billion by 2026, providing another source of income to spend on travel and accommodation services. This will help to compensate for the slower pace of growth projected in disposable income and consumer spending resulting from the gradual slowdown in overall employment growth in Canada over the longer-term. High consumer debt levels and the gradual increase anticipated in interest rates are also expected to put pressures on household budgets, restraining discretionary spending on travel and accommodation services. On average, the industry’s real GDP is projected to increase by 1.5% annually over the period 2017-2026, a notable acceleration relative to the previous ten years. Faster growth in output is expected to result in higher employment, with job creation averaging 0.6% per year. However, a significant part of production growth is projected to be met by additional gains in productivity by implementing, for example, new technologies such as online ckeckouts. This reflects the need to contain labour costs vis-à-vis increased competition, particularly from new business models like Airbnb and HomeAway. Many of the rentals found through those digital platforms are less expensive than hotels and often offer a more unique experience than traditional accommodations, thereby appealing to budget-conscious travellers. Given the weaker pace of growth anticipated in Canada’s labour supply and the gradual tightening of the labour market, low wages that characterized this industry will also make it increasingly challenging for employers to compete with other industries to attract workers, forcing businesses to increase their level of productivity.

Real GDP and Employment Growth Rates in Accommodation Services

Figure showing the annual growth of real GDP and employment over the periods 2007-2016 and 2017-2026 for the industry of Accommodation Services. The data is shown on the table following this figure

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

Text Version of Figure Real GDP and Employment Growth Rates in Accommodation Services, 2007-2016 and 2017-2026, in Percent
  Real GDP Employment
2007-2016 0.9 0.0
2017-2026 1.5 0.6

Source: Statistics Canada (historical) and ESDC 2017 COPS industrial scenario (projections).

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