Labour Supply & Demand Projections Model Canadian Tourism Human Resource Council Labour Supply & Demand Projections Model FLMM LMI Working Group Vancouver, BC October 18, 2007

The Background Historically COPS basis for demand growth rates Applied formula to COPS to get growth rates for tourism NAICS Needed to better understand current and projected labour supply/demand gap No existing supply data available Tried to create own supply data but not comparable to demand data

Requirements of the Model Supply and demand data must be comparable National, provincial and potentially regional data Model needs to be responsive, flexible and timely Representative of what industry is feeling Ideally able to compare data to other sectors

Approach Based on the Construction Sector Council (CSC) model (Macroeconomic model & Industry input) Industry input collected through two sets of 10 focus groups (1/province), on-line survey, in-depth interviews Use of existing economic indicators, labour force information from established data sources (i.e. NTI, TSA HRM)

Selected Providers The Conference Board of Canada’s Canadian Tourism Research Institute (CTRI) was chosen through RFP process to develop the model using macroeconomic indicators and focus group input Expertise in tourism economic indicators Experience building economic models Access to CBoC labour economics data Omnifacts Bristol Group selected to facilitate focus groups Experience working in tourism Expertise in focus group facilitation

Timeline Summary Initial model development March/April 07 Focus groups May/June 07 On-line survey/interviews May – Sept 07 Focus groups (validate results) Oct/Nov 07 Final delivery of model Mar 08

Preliminary Results Tourism Labour Supply and Demand Gap

Model Details (Tourism/non-tourism) demand projections for tourism goods and services Forecasts of domestic and foreign tourism demand by NTI category developed using our tourism models Provincial distribution of tourism demand based on 1998 PTSA and grown out using our tourism models (constrained by national) Forecast of non-tourism demand driven by CBoC model forecasts Provincial distribution of non-tourism demand also based on 1998 PTSA and grown out using CBoC models (constrained by national)

Model Details Labour demand generated by demand for tourism goods and services - National HRM provides details (gender, age, immigrant status) for 5 industry groups, and 37 distinct tourism sector occupations for 2005 Linked to overall sector (tourism/non-tourism) revenue, in TSA/NTI framework, through implicit productivity measures for 2005 Productivity assumptions going forward based on historical trends and relationship with overall economy

Model Details Labour demand generated by demand for tourism goods and services - Provincial Provincial employment shares from custom LFS tabulation (2005) applied to 2005 HRM to establish constraints for overall province and at industry level Fixed occupational breakdown within industry to national Establish link to estimated sector revenue (tourism/non-tourism) in TSA/NTI framework, through implicit productivity measures for 2005 Productivity assumptions going forward also based on historical trends and relationship with overall economy

Model Details Labour shortage projections in tourism sector Shortage calculated as labour demand minus labour supply Approach suggests gap of 0 in 2005 Refined approach implies that gap may not be 0 in 2005 Go back to establish benchmark either based on a stable period of growth (late 1990’s) or recent period when labour shortages not likely to exist (2003) Our choice was to use to 2003

Next Steps - Modelling Integrate “levers” for health/retirement age Boost demand for leisure/business travel and supply Integrate “levers” for seniors income Boost leisure demand Integrate “levers” for part. rates (seniors/immigrants) Boost supply Integrate “levers” for in/out seasonal migration Refine supply (regional fine-tuning and possibly reduce supply)

Next Steps – Modelling Develop market interaction model Integrate capacity constraints (developments that don’t take place due to growing challenge of staffing) Effects of real (and relative) wage changes Relative wages increase, supply increases However, demand also declines due to higher costs, poor customer service due to labour shortage Smaller gaps as a result Ultimately, the model will determine where the sector is likely to operate at (lost output)

Next Steps Analyze results Make improvements where needed Run on a yearly basis Expand to sub-provincial level (metro areas, resorts) Compare demand to COPS demand

Thank you! www.cthrc.ca www.emerit.ca