We asked agents how Ontario’s Staycation Tax Credit will impact business in 2022
Niagara Falls, Ontario

We asked agents how Ontario’s Staycation Tax Credit will impact business in 2022

TORONTO — “What about us?” has been a common refrain among travel agents throughout the pandemic. From dealing with commission recalls to seeing limited access to government financial programs like Bill C-2, which does not extend to independent agents, the list of challenges that travel professionals have faced for close to two years has been long and relentless.

And now a new challenge is upon them: Ontario’s Staycation Tax Credit, which launched Jan. 1 and runs until Dec. 31, 2022. Billed as a first-of-its-kind initiative that aims to help revive Ontario’s tourism industry, the credit provides Ontario residents with a 20% refund of eligible 2022 accommodation expenses of up to $1,000 for individuals and $2,000 for families, for a maximum credit of $200 or $400, respectively, for vacationing in Ontario this year.

This, of course, is great news for consumers. But for travel agents who have typically not been used to book domestic trips on their clients’ behalf, the Tax Credit is yet another hurdle in their road to recovery. With no incentive to book with a travel professional, agents are now worried that they’ll be shut out of the booking process entirely and, consequently, some much-needed commissions.

“My initial reaction upon hearing about the tax credit was, why couldn’t it be for any travel arrangements made through a travel advisor to help support agents or agencies that are struggling?” says Cindy Gaudet, COO, Fareconnect Travel, Winnipeg. “Anything that promotes travel is a good thing but most agents book little domestically. Most Canadians feel comfortable booking within Canada so I feel this trend would continue with the travel credit. It would actually support the bigger online businesses more than smaller agencies and agents.”

Lise Archambault of Algonquin Travel & Cruise Centre – TravelPlus in Ottawa, who tells Travelweek she has “zero interest” in the tax credit program, says that the current climate makes travel to any destination, even ones in Canada, very difficult, thus minimizing the program’s impact.

“For travel outside your province where air is required, airlines are either cancelling or changing routes daily without notice, meaning the client could be stuck with penalties. Also, some provinces like Newfoundland and P.E.I. have quarantines. Travel is just too unstable right now to book with confidence,” says Archambault. “I see nothing in it for us agents personally, unless it’s a very high-end property that actually pays commission although many don’t.”

Many in the travel industry had high hopes for some real recovery in 2022 now that the majority of Canadians are fully vaccinated (78.2% according to Our World in Data, as of Jan. 17, 2022). However, as Zeina Gedeon, CEO of TPI, argues, programs like these, coupled with ongoing travel restrictions, may actually deter Canadians from travelling at all this year.

“A similar program would have been a great benefit to our advisors and an incentive for their clients back in 2020 or even 2021, when travel was more localized and customers wanted staycations,” says Gedeon. “But travel advisors are disappointed because now that clients are vaccinated and ready to travel, the Ontario Government is incentivizing them to stay local while at the same time penalizing the clients who want to travel outside of the country by requiring a negative PCR test upon their return to Canada.”

Currently, the federal requirement requires Canadians returning home from abroad, regardless of trip duration, to show proof of a negative PCR COVID-19 test to re-enter the country.

Is the demand there?

When asked whether they’ve seen an increase in inquiries and/or bookings for Canada travel since the Ontario government first announced the Staycation tax program last November, Both Gaudet and Archambault tell Travelweek that so far, clients have shown little to no interest.

“Not one client has asked me about the Staycation Tax Credit,” says Archambault. “They are itching to travel outside of Canada.”

Gaudet, whose host agency has agents located throughout Ontario, says that “surprisingly, we have not heard anything from our advisors or clients [about the Tax Credit],” and that considering the lack of interest about the program, she does not believe many clients will be taking advantage of it.

Hotels, similarly, are reporting slow-growing numbers for Canada bookings. Beata Cieplik, Regional Vice President Canada, Marketing Commercial and Revenue Management of InterContinental Hotel Group, tells Travelweek that “due to the recent rise of restrictions again, we are not able to see any significant numbers yet” for Ontario hotel bookings, though she remains hopeful that they will pick up in late spring.

Can the Staycation Tax Credit be a benefit to agents?

Although selling domestic trips may be more of a challenge for travel agents, Ontario’s Staycation Tax Credit does present a unique opportunity for them to more easily sell Ontario. Gaudet thinks agents can definitely take advantage of the program, telling Travelweek that she would “advertise that using this Staycation Tax Credit with an advisor is supporting local businesses.” Gedeon also agrees, adding that TPI advisors can use the program as a selling tool when booking staycations and promoting local tourism in Ontario, and that any tourism program can be capitalized by agents to help increase sales.

Heidi Hurst, a TPI agent in Calgary who started a Commission Recall Petition in 2020 that was eventually tabled in Parliament in January 2021, tells Travelweek that the Tax Credit is a good idea, though it should be used in a way that encourages booking with a travel advisor to include small local businesses. However, this would require training and education for agents who are unfamiliar with Canada products, something Hurst says few are willing to undertake given the lower sticker price of domestic trips.

“I know many advisors who didn’t feel they knew enough about Canada to accept the challenge of spending more time on research than they would be paid for,” says Hurst. “And oddly enough, domestic suppliers are less adept at working with travel agents and there are very few booking channels that provide commission.”

Hurst adds that she would encourage the government to use domestic booking options “to get away from a reliance on multinationals.”

Says Hurst: “A lot of Canadian suppliers were having trouble while it seems that those travelling without an advisor were on the OTAs. There was a real disconnect. We need more people, suppliers and advocacy to break the myth around travel agents ‘no being a thing anymore.’ I feel credits like this one have a great ability to generate domestic economic momentum.”

IHG hotels to book in Ontario

IHG’s Cieplik says that she’s excited about the Staycation Tax Credit, which she believes will be vital to the survival of the travel industry. She notes that in 2021, IHG saw domestic travellers return to its hotels, an encouraging sign for what may come in 2022.

“Canadians have an appetite to explore their backyard and stay close to home because of the uncertainty and challenges of travelling abroad,” says Cieplik. “It’s too early in the year to see if there has been a positive impact of the Ontario Tax Credit, however, we know that it has started up the conversation about local travel again for 2022 and created awareness amongst guests.”

Here are a few IHG Ontario hotels to consider for 2022:

  • Holiday Inn Kingston – Waterfront: Located in the historic downtown area of Kingston, this hotel is situated within a five-minute walk from the Kingston waterfront, the K-Rock Centre as well as an array of locally-owned shops and boutiques.
  • Crowne Plaza Niagara Falls – Fallsview: Perfect for dream weddings, this hotel’s close proximity to the Falls is its top selling point, not to mention its newly renovated lobby, elegant accommodations and popular Prime Steakhouse.
  • Holiday Inn Express & Suites Collingwood: Located just two kilometres from downtown Collingwood and 15 minutes from Blue Mountain Resort, this hotel offers complimentary Express Start Breakfast, a fitness centre and an indoor pool and whirlpool.
  • Holiday Inn Ottawa Dwtn – Parliament Hill: History abounds at this hotel, which is located within walking distance to Ottawa’s most iconic landmarks, including the Senate of Canada Building and House of Commons at West Block.

For more information go to https://www.ihgagent.com/web/tcc/ihg-commission-services.

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