As gas prices reach record highs, those working in tourism and hospitality say it will force people to make difficult decisions about where to travel this summer.
The average price of gas in GTA, and in most of southern Ontario, is expected to reach a new record this weekend. According to Canadians for Affordable Energy, a group that monitors the cost of fuel for consumers, gas prices should reach 212.9 cents per liter on Friday. On Saturday, they are expected to reach 215.9 cents per liter, the group says.
“It’s going to limit how many trips people take and how far they’re willing to go,” said Wayne Smith, a professor of hospitality and tourism management at the Ted Rogers School of Management at Toronto Metropolitan University.
Smith says the combination of the COVID-19 pandemic and rising gas prices will hamper the recovery of the tourism industry, especially in rural areas that depend on city dwellers vacationing and visiting their businesses.
Inflation is already raising the prices of other goods and services, making the problem worse.
“Many trips become very unaffordable,” he said.
Smith adds that it will force people to take fewer trips and to closer destinations.
He remembers the last time people talked about gas prices like this, was the energy crisis of the 1970s. At the time, high gas prices changed consumer behavior, and he expects a similar situation this time.
“If we look historically when there are bad economic times, travel budgets are usually the first thing that is cut out,” Smith said.
He says it will make recovery slower and more painful for an industry that is already struggling.
In response to volatility, some business owners take some unique approaches.
Jessica Off, the owner of Guess Where Trips Inc., offers surprisingly self-guided car rides from a variety of themes.
She started the business in January 2020 and says that COVID-19 was more destructive to the industry than gas prices at that time. But now, she says, it is the cost of fuel that dictates travelers’ decisions.
They drive together to share money on gas, they choose closer destinations, and they choose to stay overnight to try to take advantage of the Ontario Staycation Tax Credit – where Ontario residents can claim up to 20 percent of eligible living expenses this year.
“We’ve heard a lot of comments from travelers about gas prices, so a lot of people are pushing their potential vacations aside and doing more local trips,” Off said.
Smith says these decisions could increase local traffic in Toronto, where people can choose to spend the weekend closer to home instead of driving to more remote destinations across the province.
“We can see a big increase in local traffic as people replace the weekend trip with a more local stay.”