Caution may rule out quick rebound
Consumers more thoughtful about restaurants, travel as restrictions begin to ease
As much as she has always loved travelling, Kate Marshall is in no hurry to jump on a plane as soon as pandemic restrictions are lifted, unless it’s to see elderly relatives in Britain, where most of the population has already been vaccinated.
“I’m worried that if I don’t get there soon, they won’t be there,” said Marshall, 60, a Toronto advertising executive. “Otherwise, I’ve learned to appreciate home a lot. I think a lot of my travel will be Canadian. I’ve been thinking about driving places, too, and wondering if I’d feel safer in a car. Certainly, in the next 12 to 18 months, I’ll be doing more of that kind of travel.”
Nor does Marshall foresee a quick move back to fine dining, something else she loved, unless it’s on a patio.
“For my friends and me, it’s all about patios, at least for 2021,” she said. “A lot of it will be about socializing and celebrations with friends, not as much about trying out high-end restaurants. A lot of us have simplified our lifestyles and fed ourselves without having to go to a restaurant. I’ll be entertaining in my backyard more.”
Marshall is typical in her approach to pleasures many Canadians once took for granted. A new Leger survey conducted for Ratesdotca shows that although 35 per cent of Canadians cut their travel budgets by $200 or more per month during the pandemic, only 22 per cent plan to increase their travel budgets by the same amount in 2021.
As for restaurant dining, the survey indicates that 39 per cent of Canadians decreased their monthly outlays by at least $50 during COVID-19; 17 per cent cut their monthly restaurant spending by $200 or more. When restrictions lift, 33 per cent of respondents plan to increase their dine-in restaurant spending by at least $50, but only seven per cent plan to boost their dine-out budgets by at least $200.
“Recovery doesn’t mean a snap back to pre-pandemic levels, especially with travel,” said Jameson Berkow, managing editor for RATESDOTCA. “People have some trepidation.”
The travel industry certainly isn’t expecting an immediate rebound, says Richard Vanderlubbe, president of tripcentral.ca, an Ontario-based travel and tour company.
“We’re seeing a bit of booking for October, falling in line with government predictions that people will be vaccinated by September,” said Vanderlubbe, who is also a member of the board of the Association of Canadian Travel Agencies, “but most bookings are for November and beyond.
“For trips that only require a small deposit and may allow cancellations, smart people are booking ahead, because if restrictions lift and everything comes onto the market at once, prices will soar. Canadians need confidence that they won’t lose money.”
The travel industry is uncertain how and when restrictions will be lifted — whether they’ll be given any warning, whether there will be a road map or phased-in approach like the one in Britain, and what rules, such as quarantines and vaccine passports, will apply.
As more people are vaccinated, “Canada will probably follow the lead of other countries,” Vanderlubbe said. “We can begin to see the light at the end of the tunnel.”
The restaurant industry doesn’t anticipate a quick return to pre-pandemic prosperity either, although restaurateurs are hopeful about starting on the road to recovery this year.
All branches of the restaurant industry took a big hit during the pandemic, and full-service restaurants saw a 37.3 drop in sales between 2019 (pre-pandemic) and 2020, according to Restaurants Canada. Their modelling data anticipates a rebound of almost 11 per cent this year if restrictions ease.
Much of the growth will likely be due to patio dining.
“There is definitely light at the end of the tunnel and a recovery point, but it’s not instantaneous,” said Chris Elliott, chief economist for Restaurants Canada.
“In fact, not until 2023 do we expect the industry to return to normal.”
Even when people feel safe to dine indoors at restaurants again, Elliott expects a portion of their revenue to continue to come from delivery; consumer habits have changed and restaurants are eager to meet their needs.
An Angus Reid poll conducted for Restaurants Canada revealed that roughly 80 per cent of table-service restaurants offered takeout and delivery before the pandemic; this number rose to 94 per cent during the pandemic.
After the pandemic is over, 99 per cent of table-service restaurant respondents said they will offer takeout and delivery.
Lisa Kramer, a professor of finance at the University of Toronto who specializes in consumer behaviour, isn’t surprised by any of these predictions.
“It stands to reason there is pent-up demand in these spending categories, and people are planning on making up for lost time, to some extent, when restrictions ease,” Kramer said via email.
“At the same time, many people have simplified their lives over the past year. … So, while expenditures in some categories will likely increase, others will likely remain lower than pre-pandemic levels (e.g., dry cleaning, business attire).
“I hope the end result is that people will generally find themselves more inclined to use their money on experiences that bring them pleasure, which some research suggests is the path to happiness.”