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Banniere - histoire industrie

History of the Canadian Travel Industry

A century of innovation and resilience

Travel agents have been around since the early part of the last century, making them the oldest members of the travel industry.

The first travel agents sold tickets on the various steamship lines that carried passengers to countries around the world.

Originally travel agents made bookings for their clients by phone, but gradually, computerized booking systems came into effect, followed by GDS systems. Agents went from writing paper tickets on ticket stock provided by shipping companies, airlines, tour operators and other suppliers – to issuing electronic tickets today that show up on the client’s smart phone!

Passenger airlines came about after WW11 when there was a proliferation of both aircraft and trained pilots, with travel agents eventually authorized to sell airline tickets.

Mass tourism began in the ’70s

Mass tourism started to take off in the ’60s and ’70s with the arrival of jet aircraft. Scheduled airlines and charter tour operators began operating in the United Kingdom and Europe – using travel agents for distribution.

Canada followed soon after but due to federal regulations at the time, the only way tour operators could offer a charter flight was if the passengers were members of a club or affinity group.

The first charter trip to Cuba was in the early 1970s and was operated by Unitours, founded by Graham Atkin, who was granted permission to bring Canadian tourists to the communist island.

Around then, several other tour operators sprung up and either started their own charter airlines, or bought block space on scheduled airlines and negotiated rooms at resorts and hotels – operating one- and two-week holidays to places like the Bahamas, Jamaica, Hawaii and Barbados, and later expanding to Mexican resort areas and beyond. Thus, the package holiday!

Tour companies & charter airlines

The early tour companies in Canada included Strand Holidays, Golden Wing, Suntours, Paramount Holidays, Adventure Tours, Sunquest Vacations, Treasure Tours, Signature Vacations, Transat Holidays, Carousel Holidays, Regent Holidays, Conquest Vacations, Wardair Holidays, Nolitours, Tours Mont-Royal, CPAir Holidays, Sol-Vac, Mirabelle Tours & Touram—to name a few.

Meanwhile, the rules were eventually relaxed for charter airlines and they moved away from having to be affinity charters, but still operated under stringent regulations.

Several charter airlines came – and went. These included Worldways, Wardair, Canada 3000, Royal Aviation, Nationair, Zoom Airlines, Skyservice, Roots Air and more.

Failures brought provincial regulation

The collapse of many of these airlines and/or tour operators resulted in Canadians being stranded around the world and both Ontario and Quebec moved to regulate the travel industry, creating Compensation Funds and requiring tour operators and travel agents to pay a portion of their sales into the fund.

These regulatory bodies exist today as TICO in Ontario and the OPC in Quebec.

British Columbia does have some regulations but no compensation fund.

Canadian industry similar to U.K.

The travel industry in Canada was largely founded on the same model as the U.K. and parts of Western Europe. In fact, a lot of the original pioneers in Canadian travel immigrated to Canada from the U.K. and France.

The U.S. model grew in a different direction, with scheduled airlines providing the lift with only a few charter airlines in certain markets.

The Canadian travel industry comprised travel agents, charter tour operators with their own airlines, and wholesalers such as Red Seal and Holiday House. International coach tour companies, car rental companies and cruise lines all opened offices in Canada – as did companies specializing in Australia and New Zealand and Southeast Asia and China. But the majority of Canadians took package holidays each winter.

Throughout most of the 20th century, travel agents remained the primary distribution channel for all of these suppliers. They were originally either operating as independents or were part of an agency chain like Marlin Travel, Sears Travel or American Express.

Later, in the 1980s, various agency consortia formed and independents joined companies like Giants and Uniglobe and T-Comm. These groups negotiated commissions and overrides on behalf of their members and provided various marketing tools.

Canada’s airlines

The story of Canada’s scheduled airlines could have many chapters, but today there are five established airline players in Canada, with several others just entering the market.

Canada’s national airline and flag carrier is Air Canada, first formed in 1937 through federal legislation as Trans-Canada Airlines to provide flights from coast to coast. An act of parliament changed the name to Air Canada in 1965. Eventually Air Canada became a public company. Through many ups and downs, Air Canada, today, is a major international airline.

WestJet was founded in 1994 as a low-cost alternative to Canadian scheduled airlines by Clive Beddoe, David Neeleman, Mark Hill, Tim Morgan and Donald Bell. WestJet soon became a public company and expanded its operations across Canada and to the U.S. and winter sun destinations.

Air Transat was founded in 1986 by Francois Legault, Jean-Marc Eustache, Philippe Sureau, Lina de Cesare, Yvon Lecavalier and Pierre Menard. Air Transat is now a public company and operates to many destinations in the Caribbean, Mexico and Central America as well as a large program to Europe.

Sunwing Airlines was launched in 2005 as a subsidiary of the Sunwing Travel Group. The airline was founded by Colin Hunter and Mark Williams. Sunwing operates across Canada providing international flights to sun destinations as well as domestic routes.

PAL Airlines is a regional airline based in St. John’s, Newfoundland serving Eastern Canadian gateways and is the second largest regional airline after Air Canada Jazz.

Porter Airlines was founded in 2006 by Robert Deluce, the former CEO of Air Ontario. Porter is a regional airline that operates Bombardier Q400 turbo-prop aircraft from its base at Billy Bishop Airport on the Toronto waterfront to destinations in Eastern Canada and the U.S.

In 2023, Porter entered a new era as it becomes the North American launch customer for next-generation Embraer E195-E2 jets, which will be deployed from Toronto Pearson International Airport.

The airline is expanding operations throughout North America, including to the west coast, southern U.S., Mexico and the Caribbean.

Canada Jetlines, an all-new leisure carrier based in Mississauga, ON, is also ramping up operations as it expands with new service to U.S. cities and south destinations, like Mexico.

Additionally, several low-cost airlines have entered the Canadian market in recent years. They include Edmonton-based Flair Airlines, as well as Calgary-based Lynx Air and Swoop, which is owned by The WestJet Group.

The ’90s – a decade of disruption

A number of things happened in the 1990s – British tour conglomerates started buying Canadian tour companies. And then they started buying travel agencies and created vertical integrated companies that owned an airline, tour operator(s) and travel agencies.

This shift caused travel agencies to cry foul as there was concern the travel agencies owned by tour operators would get preferential pricing and commission. But generally, this turned out not to be the case. The tour operators had to ensure fairness, or they would lose support from the independent agency chains and consortia.

Around that time, some tour operators slowly started selling direct to the consumer which caused big protests from travel agents but in the end, it became clear that tour operators could only effectively service a small number of sales this way and the vast majority still came from travel agent.

The boldest move came in 2004 by a company called Go Travel Direct, started by Hugh and John Boyle from the U.K. With an aggressive marketing campaign aimed at travel agents, the company became a pariah. It subsequently failed to gain traction – but not without causing a major commotion in the industry.

And then came the game changer

Probably the biggest threat to travel agents was the arrival of the internet. There were many predictions of doom for travel agents. Now suppliers could easily bypass the travel agent and reduce distribution costs – and the internet provided the platform for the first online travel agencies (or OTAs).

The advent of the giant OTAs both in Canada and the U.S. was a major turning point. Companies like Travelocity, Expedia, Priceline, Orbitz, Kayak emerged. Soon, some of these companies started to discount making it hard for smaller agencies to compete.

In Canada, companies like iTravel2000 and SellOffVacations dominated the online discounting scene.

The internet has now been adapted by travel agents in many ways, including having their own bookable websites, online booking engines, social media and payment systems.

While store front travel agents were thought to be on their way out, they continued to exist across Canada.

2008 changed retail travel model forever

In 2008, during the global financial crisis, many travel agencies went out of business in the U.S. and the U.K. and this gave birth to the home-based travel agent.

These travel agents suddenly found themselves with plenty of clients but no travel agency. And so they serviced their clients from their homes and host agencies sprung up to support them. The phenomenon spilled over into Canada, although more slowly.

Today, over 50 per cent of travel agents in Canada are home-based, supported by large host agencies.

As commissions shrank over the years in various sectors of the industry, travel agents learned to apply service charges for their time. There was reluctance at first, but today, most travel agents charge fees for their services.

The COVID-19 pandemic – an unprecedented challenge

In 2020, the travel industry worldwide was about to be hit by a tsunami. As COVID-19 spread around the world, airlines were effectively shut down. People were told by their governments to stay home. Hotels and resorts were largely empty and cruise ships were forbidden to operate.

The Canadian government called all Canadians to return to Canada in March 2020, days before March break holidays were to begin. Travel agents in Canada worked around the clock for weeks to bring customers home and to cancel future trips. It was chaos.

Travel agencies soon went to zero revenue. Or worse – negative.

Travel advisors then spent months trying to get refunds for their customers. Airlines negotiated financial support from the federal government and tour companies went dormant. Thousands were laid off or let go in the travel industry.

Present Time – Back in business

After two extremely difficult years, and after losing more than 1,000 travel agents during the pandemic, the industry is now back on its feet and flourishing. Canadians are travelling again in large numbers.

Travel agents are in high demand because after all of the turmoil, customers feel safer working with an agent.

Throughout the entire history of travel in Canada, travel agents have proven to be remarkably resilient, adapting constantly to change, and dealing with every possible crisis and emergency the world can throw at them. Bravo!