COVID-19 IMPACT & RECOVERY REPORT (2020 - 2022)ALBERTA

MAY 29, 2020

Travel Alberta, in partnership with Destination Canada, is compiling and analyzing data from a number of sources to understand how travel and tourism will resume in Alberta.

COVID SITUATION: Current restrictions and news of potential changes.

ECONOMIC LANDSCAPE: Economic health and key indicators of recovery and travel viability.

TRAVEL INDICATORS: Research findings on consumer mindset, traveller search trends and, ultimately, hotel and air booking trends.

RESIDENT SENTIMENT: Trend analysis of Destination.

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ALBERTARECOVERY STAGE

• COVID Response - No travel • Community / Local - Physical distancing operational requirements. Non-essential businesses in Alberta open. • Within Alberta - National parks reopen. Consumers travel by car within the region. • Inter-provincial travel - Non-essential travel no longer discouraged. Uplift in domestic leisure travel. • Canada/US Travel - Canada / US border reopens for land and air travel. • Gradual Reopening to Overseas - borders gradually reopen to inbound markets that have contained COVID. • Normalized Domestic & International - Canadian & international travel indicators stable.

Current market stage: Community / Local

The COVID-19 pandemic is on a downward trajectory in Alberta, with a 12 per cent decrease in the number of new cases week over week. As the Alberta Relaunch Strategy moves through Phase 1 to Phase 2 later in June, more businesses will reopen.

Source: Government of Alberta, May 21, 2020

COVID-19 SITUATION

Phase 1 public health guidelines are now in place for all areas.

This early phase included the opening of boat launches, vehicle access to parking lots and staging areas, golf courses opening with common-area restrictions, scheduled non-urgent surgeries and regulated health-care practitioners can reopen, such as dentists and chiropractors. On May 14, Alberta Parks online campground reservations system opened for select campgrounds starting June 1, for Albertans only. As of June 1, businesses and facilities have reopened, including retail stores, farmer’s markets, personal services, restaurants, museums, outdoor recreation, shopping centres, daycares, summer camps and post-secondary institutions, with restrictions. Masks are strongly recommended where two-metre physical distancing is not possible (eg. mass transit). Places of worship and day camps were allowed open on June 1.

Full details are here.

Guidance for reopening can be found here.

Phase 2 is scheduled to begin June 19, 2020, if case volumes continue to decline.

COVID-19 SITUATION

Alberta remains in an economic decline and recession due to COVID-19 and the oil crisis, but due to lagging indicators, the degree of severity has not been confirmed. We expect a rapid decline in disposable income that can be used for travel. • May 20, Alberta Government published the April Consumer Price Index (CPI) at 143. Year over year, for April inflation was -0.5 per

cent. The national average CPI was down 0.2 per cent. In Alberta, food had the largest increase (+3.7 per cent), while energy (-26.0 per cent) and transportation (-5.5 per cent) decreased the most.

CONSUMER PRICE INDEX: APRIL 2019 - APRIL 2020

ECONOMIC LANDSCAPE

Graph source: Government of Alberta. Graph data adapted from Statistics Canada, Table 18-10-0004-01 (Consumer Price Index, 2011 basket). This does not constitute an endorsement by Statistics Canada of this product.

ECONOMIC LANDSCAPE• May 11, RBC Economics predicts an Alberta annual GDP of -11.2

per cent. Slow recovery will continue through 2021 with an annual GDP of 4.6 per cent (this is not a return to 2019 levels as this is year over year GDP growth).

• In April unemployment rose to 13.4 per cent, which is the highest it’s been since 2016, where it reached 9.1 per cent for one month (Source: Alberta Government). Alberta job losses in March and April (360,000 or 15.5 per cent) were higher than in the last four recessions combined (Source: RBC Economics).

• The Western Canada Select oil price continues to rise week over week, now at an average of $23.40 for the week May 10-16. This is a positive sign compared to recent months, but still significantly lower than last year due to the oil crisis. Prices are typically between $35 - $45 USD.

• According to a consumer confidence article by the Conference Board of Canada, more than 30 per cent of Albertans expect to be worse off financially six months from now. The share of re-spondents who hold pessimistic views about future job prospects nudged down to 52.2 per cent in May, but it is still nearly twice as large as the long-term average (24.1 per cent). Alberta (59.2 per cent) and Ontario (57.0 per cent) topped the charts in terms of pessimism about future employment.

• Destination Canada in partnership with Canada’s 10 provincial marketing organizations, will be providing Travel intent and be-haviour indicators by province. Results of this study will be avail-able this June, July, August, September, December and April 2021.

• While Albertan travel search indexes for Canada remain more than 55 per cent lower than the same period last year, we are starting to see nominal gains with a 16 per cent increase week over week. Albertan travel search indexes for Alberta also remain over 55 per cent lower than the same period last year, we are also starting to see slight gains with a 19 per cent increase week over week. With these measures being mainly composed of flight and accommodation queries, we take this as an indication of a very slow return in interest to travel.

• In the last week we have seen a significant increase in Albertan dining indexed searches for Canada at 48.9 per cent week over week. This is still much lower than last year by more than 75 per cent for the same period, but a significant gain week over week, coinciding with the gradual easing of Alberta’s physical distancing regulations.

• Albertan local attraction indexed searches for Canada have seen a nominal gain of 15.3 per cent week over week but remains very low by over 200 per cent for the same period last year. This is not surprising considering attraction reopening is in a later phase of the Alberta relaunch strategy and travel behaviour studies are indicating a lack of interest in destinations involving crowds (Source: Google Ipsos COVID Pulse, Canada results).

TRAVEL INDICATORS

According to Destination Canada Weekly COVID-19 Resident Sentiment survey, Alberta is second for welcoming visitors from other parts of Canada at 32 per cent and elsewhere at 11 per cent, just behind Quebec. It is first for welcoming visitors from the US at 15 per cent. It ranks third highest across Canada for visitors from other communities near me (47 per cent) and from other parts of my province (39 per cent). Most numbers are up from the previous week, but it remains too early to establish a trend.

RESIDENT SENTIMENT

Alberta rural and urban results were similar in previous weeks. Now sentiment is becoming more negative in rural and positive in urban for other parts of Canada, the US and elsewhere. From other communities and other parts of my province have stayed relatively consistent for the last three weeks.

RESIDENT SENTIMENT

SECTION DEFINITIONS & SOURCES COVID CASES: The intention for this section is to provide context for the impact and recovery analysis by providing a snapshot in time of the state of the outbreak and government restrictions. For the most current information on COVID-19 in that country, readers are encouraged to seek information from official government sources.

• All International Markets: Johns Hopkins daily cases by country are manually summed.

• Alberta and Canada: Open Canada downloadable dataset. Sum of “numtoday” in period.

• Multiple news and government sources as indicated in updates.

ECONOMIC LANDSCAPE: What the markets indicators are telling us from a travel affordability perspective. Indicators vary by market. Unless source is cited, all data has been sourced from tradingeconomics.com and oilprice.com.

TRAVELLER INDICATORS: What research is telling us about the consumer mindset regarding a number of areas, traveller search trends and hotel and air booking trends from Expedia and IATA. • Google US Travel Intent Weekly Survey • Google Ipsos COVID-19 Weekly Global Pulse Survey • Google Global Travel Intent Weekly Study • Google/Destination Canada Partnered Recovery Signals Dashboard: • Travel Intent Search Index: 2020 searches on Google’s search engine for

travel related keywords compared to 2019 searches, broken down by week (i.e. week of April 19th, 2020 vs week of April 19th, 2019). Available for each market’s domestic, international, and Canada specific travel search terms.

• COVID-19 Search Index: An index of COVID-19 related queries on Google’s search engine, covering a number of topics from economic (un-employment insurance, jobs, etc.) to health-related terms. In development.

• Dining, Attractions & Events Search Index: 2020 searches for dining, attractions & events related keywords compared to 2019 searches, broken down by week. Available for each market’s domestic, international, and Canada specific dining, attractions and events related search terms. This is provided as an index rather than a volume of searches.

SOURCES & METHODOLOGICAL NOTES

DESTINATION CANADA COVID-19 IMPACT AND RECOVERY MARKET REPORTS:• RATE OF ACCOMMODATION SEARCHES: 2020 weekly searches for

accommodation on a major online travel agency (OTA) against a rate of 2019 weekly searches, broken down by week. Available for each market’s domestic, international and Canada specific accommo-dation searches. This is provided as a rate rather than a volume of searches.

• RATE OF ACCOMMODATION BOOKINGS: 2020 accommodation bookings on a major OTA against a rate of 2019 bookings, broken down by week. Available for each market’s domestic, international and Canada accommodation bookings. This is provided as a rate rather than a volume of bookings.

• RATE OF AIR TRAVEL: The volume of forward looking 2020 air bookings by month to Canada versus 2019 air bookings, broken down by week. By comparing against the 2019 average of when travel is booked for, and when it is booked, this establishes the amount of impact against each month of travel. When appropriate, this assessment is supplemented by analysis on the forward-looking planned air seat capacity within a country and to other countries.

AIR ACCESS: Percent change of total seat capacity (indirect and direct) for 2020 year over year and updates on airlines. Source: Diio Scheduled Data and multiple other sources as cited in updates.

TRAVEL PROVIDERS: Brief on the state of OTAs, RTOs and our Tour Operators. Provided by Travel Alberta’s in-market representatives and multiple other sources as cited in updates.

ACCOMMODATION: Brief on the state of the accommodation sector in Alberta and Canada only. Source: Str and multiple other sources as cited in updates.

SOURCES & METHODOLOGICAL NOTES