Tourism & Hospitality Industry in Canada

Canada’s tourism and hospitality industry is a large, geographically distributed service economy built around domestic travel, international visitation, accommodation, foodservice, recreation, nature-based tourism, Indigenous tourism, festivals, events, business travel, aviation, and regional destination development.

The country’s tourism proposition is broad. It includes major urban destinations such as Toronto, Vancouver, Montréal, Calgary, Ottawa and Québec City; natural assets such as national parks, mountains, lakes, coastlines and winter landscapes; cultural and festival tourism; culinary and multicultural city travel; Indigenous-led experiences; outdoor recreation; cruise corridors; ski destinations; and business-event markets. This gives Canada a diversified tourism base, but it also creates operational complexity because demand varies sharply by province, season, source market, transport mode, and destination type.

The sector has recovered significantly from the pandemic period and has moved back into growth, but the recovery is not perfectly balanced. Domestic travel has become a major stabilising force, while international travel remains more exposed to geopolitical conditions, air connectivity, currency dynamics, U.S. demand, visa and border processes, and global destination competition. In 2024, tourism generated about C$130 billion in direct visitor spending and supported a total economic footprint of C$263 billion, according to Destination Canada. International visitors contributed C$31.2 billion in export dollars, while tourism returned C$31.6 billion in municipal, provincial and federal tax revenue.

Canada’s tourism economy is important not only because of visitor spending, but because of its reach. Tourism supports local businesses across large cities, rural communities, Indigenous communities, seasonal destinations, transport corridors, parks, restaurants, hotels, attractions and event venues. Destination Canada states that tourism supports more than 265,800 businesses across 5,000 communities and that one in ten jobs relies on tourism-related economic activity.

At the same time, Canada’s tourism and hospitality industry faces clear structural constraints. The country has strong destination assets, but its competitiveness depends on improving seasonality, labour availability, accommodation supply, transport access, international marketing, Indigenous tourism development, sustainability, event attraction, and regional coordination. The federal tourism strategy explicitly recognises these issues, identifying strategic priorities around tourism assets, outdoor recreation, Indigenous tourism, international events, and whole-of-government coordination.

Ultimately, Canada has a credible, high-value tourism economy with strong natural and cultural assets, a resilient domestic base, and meaningful international upside. But future growth will not come automatically. It will depend on whether Canada can increase visitor yield, reduce overdependence on a few source markets, improve shoulder-season and winter demand, address workforce gaps, and turn its destination quality into consistent commercial performance.

The Market Size & Overview

Canada’s tourism economy is now back at substantial scale. The Canadian Tourism Data Collective reports that tourism generated C$129.7 billion in revenues in 2024 and contributed C$50.8 billion to Canada’s GDP, making it one of the country’s fastest-growing sectors in 2024. It also states that tourism industries make up 5.5% of businesses in Canada and account for 10% of the total workforce.

Destination Canada gives a similar high-level picture, reporting C$130 billion in direct visitor spending in 2024, equivalent to more than C$350 million per day, and a total economic footprint of C$263 billion. It also describes tourism as Canada’s second-largest service export, with international visitors injecting C$31.2 billion in export dollars into the economy.

Statistics Canada’s national tourism indicators provide a more technical view. In the second quarter of 2025, tourism spending in Canada reached C$26.5 billion, up 0.9% from the previous quarter. Domestic tourism spending was C$20.6 billion, up 2.9%, while tourism spending by non-residents was C$5.9 billion, down 5.3%. Tourism accounted for 1.77% of nominal GDP and generated 712,100 jobs in the second quarter of 2025.

This split between domestic and international spending is important. Domestic tourism is the backbone of Canada’s visitor economy. It gives the sector demand stability when international conditions are uneven. OECD data for 2023 showed domestic tourism accounting for 76% of Canada’s total tourism expenditure, with over 97 million domestic tourist arrivals, already 3.6% above 2019 levels.

International tourism remains commercially important because it brings export revenue into Canada. OECD reported that Canada recorded more than 18.3 million international tourist arrivals in 2023, equivalent to 83% of 2019 levels, and that international tourist spending reached C$24.1 billion. The leading source markets were the United States, the United Kingdom and France, with the United States alone accounting for 70% of international source-market share in 2023.

That U.S. dependence is both an advantage and a vulnerability. The United States gives Canada a large, nearby, high-frequency travel market with strong air and land connectivity. But high reliance on one source market exposes Canada to cross-border sentiment, currency movements, political friction, border delays, airline capacity, and changing travel behaviour. WTTC noted that 71% of Canada’s inbound arrivals in 2024 came from the United States.

The broader travel and tourism economy is larger than the narrow tourism GDP measure. WTTC estimated that Canada’s travel and tourism sector contributed just under C$169 billion to the national economy in 2024 and supported 1.7 million jobs. It also estimated domestic visitor spending at C$95.7 billion and international visitor spending at C$28.9 billion in 2024.

The difference between Statistics Canada, Destination Canada, OECD and WTTC figures is methodological rather than necessarily contradictory. Statistics Canada’s national tourism indicators focus on tourism GDP, tourism spending and tourism jobs using Canada’s statistical framework. Destination Canada presents direct visitor spending and broader economic footprint.

WTTC uses an economic-impact model that includes direct, indirect and induced effects. For a report-style blog, the safest approach is to state the source and avoid mixing figures as though they are identical.

Hospitality is one of the most visible components of the tourism economy. Accommodation and foodservice are directly affected by domestic leisure travel, business travel, events, international arrivals, seasonal tourism, festivals, sports, and urban visitation. In the second quarter of 2025, Statistics Canada reported that tourism GDP growth was driven by accommodation services, which increased 2.4%, while food and beverage services grew 1.0%.

Foodservice is also a major standalone hospitality sector. Statistics Canada reported that annual sales of food services and drinking places reached C$101.4 billion in 2025, up 5.6% from 2024. Limited-service eating places reached C$47.3 billion and accounted for 46.6% of subsector sales, while full-service restaurants reached C$43.6 billion and represented 43.0% of subsector sales.

This matters because Canada’s hospitality economy is not only hotels and tourism attractions. Restaurants, cafes, bars, catering, special food services, quick-service restaurants, independent operators, franchise systems, and neighbourhood food businesses all form part of the visitor experience. They also serve local residents, so their performance reflects both tourism demand and domestic consumer conditions.

Canada’s foodservice sector is still operating in a difficult cost environment. Restaurants Canada’s Foodservice Facts 2024 described the industry as being at a pivotal moment, with incremental growth expected but ongoing challenges from economic pressure, changing demographics, consumer behaviour and post-disruption operating conditions. Statistics Canada also noted that restaurant food prices increased 2.6% in 2025, while prices for alcoholic beverages served in licensed establishments increased 2.7%.

Canada’s tourism and hospitality market has three main demand layers.

First, domestic travel provides the foundation. Canadians travelling within Canada support hotels, restaurants, attractions, parks, ski areas, road-trip routes, festivals and regional destinations. In 2025, this became even more important as domestic spending increased while some outbound and inbound patterns weakened. Statistics Canada reported that domestic tourism spending rose 2.9% in the second quarter of 2025, coinciding with a 13.0% decline in Canadians returning from overnight trips to the United States.

Second, international visitors provide export value. They support major cities, gateway airports, iconic destinations, tours, hotels, restaurants, retail, events and experiences. However, international demand has been uneven. In the second quarter of 2025, tourism expenditures by international visitors fell 5.3%, while overnight travel to Canada by international visitors declined 6.9% and overnight travel from the United States fell 10.2%.

Third, events, outdoor recreation and destination-based experiences create high-value demand. Festivals, conferences, sporting events, winter tourism, parks, cruises, cultural events, Indigenous experiences and culinary travel all increase visitor motivation and help destinations move beyond generic sightseeing. Canada’s federal strategy explicitly identifies international events, recreation, the outdoors and Indigenous tourism as strategic priorities.

The overall market picture is therefore strong but uneven. Canada has a large visitor economy, a resilient domestic market, strong foodservice scale, globally attractive natural assets, and credible international brand value. But the country still needs to increase international competitiveness, manage source-market concentration, improve labour availability, extend seasonal demand, and ensure tourism development remains sustainable.

Recent Developments

First, the sector is transitioning from recovery to active performance management. Canada’s tourism sector has largely moved beyond the immediate post-pandemic rebound phase, but growth is no longer uniform across all demand sources. Statistics Canada reported that tourism GDP grew 1.3% in real terms in the second quarter of 2025, outpacing most sectors, while economy-wide real GDP by industry declined 0.2% in the same quarter.

Second, domestic tourism remains a primary stabilizing force. Domestic spending rose 2.9% in the second quarter of 2025, after a smaller 0.3% increase in the first quarter. Statistics Canada linked this increase to fewer Canadians returning from overnight trips to the United States, indicating that some Canadian travel demand shifted back into the domestic market.

This domestic shift is commercially useful for Canadian hotels, restaurants, attractions and regional destinations. When residents travel within the country instead of abroad, more spending remains inside the Canadian economy. The increase in domestic tourism spending in the second quarter of 2025 was driven by accommodation services, food and beverage services, and non-tourism products.

Third, international visitor spending remains under pressure. In the second quarter of 2025, tourism spending by international visitors in Canada declined 5.3%, following a 1.7% drop in the first quarter. Statistics Canada reported declines across all product categories, with accommodation, food and beverage services, and non-tourism products contributing significantly to weaker tourism exports.

This is one of the most important risks in Canada’s current tourism outlook. Domestic demand can stabilise the sector, but international visitors bring new export dollars. If Canada’s international recovery underperforms, the country may grow in visitor volume and domestic spending while still missing higher-yield export opportunities.

Fourth, travel patterns between Canada and the U.S. are shifting. Statistics Canada reported that overnight travel from the United States to Canada fell 10.2% in the second quarter of 2025, while Canadians returning from overnight trips to the United States fell 13.0%. WTTC separately highlighted concerns around Canada’s reliance on the United States, noting that 71% of inbound arrivals in 2024 came from the U.S.

For Canada, this creates both downside and upside. The downside is obvious: fewer U.S. visitors directly affect hotels, restaurants, attractions, retailers and border-region businesses. The upside is that fewer Canadians travelling to the U.S. can redirect some spending into Canadian destinations. The policy challenge is to retain this domestic substitution without losing sight of the larger need to rebuild international demand.

Fifth, strong foodservice sales are being offset by persistent margin pressure. Statistics Canada reported C$101.4 billion in food services and drinking places sales in 2025, up 5.6% from 2024. But price increases also contributed to sales growth, with food purchased from restaurants up 2.6% and alcoholic beverages served in licensed establishments up 2.7%.

For operators, this means headline sales growth does not automatically equal healthier economics. Restaurants may still face pressure from labour costs, food inflation, rent, utilities, insurance, debt service, consumer price sensitivity and lower traffic in some segments. In a market like Canada, where independent operators and franchisees are both significant, the quality of growth matters more than revenue growth alone.

Sixth, accommodation services are driving tourism GDP growth. In the second quarter of 2025, accommodation services grew 2.4% and were the main driver of tourism GDP growth. This suggests continued strength in room demand, pricing, or both in certain markets, especially where domestic travel, events and seasonal demand are strong.

However, accommodation performance should be read carefully. National-level growth does not mean every hotel market is healthy. Urban hotels, resort properties, roadside motels, ski lodges, remote lodges, short-term rentals and small independent accommodations face different demand cycles. Some destinations are constrained by seasonality and labour availability, while others are constrained by supply, infrastructure or affordability.

Seventh, sustainability and destination management have become commercial priorities. Canada’s federal strategy explicitly recognises sustainability and environmental impact as sector-wide concerns, including reducing waste, water use and energy consumption, improving buildings and destination infrastructure, and aligning tourism with broader climate commitments.

This is not cosmetic. Canada’s tourism appeal depends heavily on natural landscapes, parks, coastlines, mountains, wildlife, winter environments and outdoor recreation. Climate change, wildfire risk, extreme weather, insurance costs, ecological stress, overcrowding and infrastructure strain are direct business risks for tourism and hospitality operators.

Eighth, Indigenous tourism is receiving a strategic, community-led push. Canada’s federal strategy identifies Indigenous tourism as a growth area and connects it to reconciliation, cultural preservation, economic development and community-led tourism. The strategy includes initiatives such as the Indigenous Tourism Fund and other Indigenous business and infrastructure supports.

Indigenous tourism is a distinctive opportunity for Canada because it offers experiences that cannot be easily replicated by competing destinations. But it must be developed carefully. The strongest model is community-led, culturally respectful, commercially viable, and controlled by Indigenous communities themselves. Poorly executed Indigenous tourism risks becoming extractive, tokenistic or operationally weak.

Ninth, events and festivals are playing a larger role in driving urban demand. Canada’s tourism strategy states that festivals and events are integral to tourism because they attract domestic and international visitors and strengthen Canada’s cultural offer. This is particularly important for urban destinations, shoulder-season demand, hotel occupancy, restaurant traffic, nightlife, transport systems and local brand visibility.

Finally, data and tourism intelligence are becoming central to investment decisions. The Tourism Data Collective has become an important platform for industry stakeholders, offering tourism performance indicators, visitation data, revenue trends and research products. It reports that tourism generated C$129.7 billion in revenues in 2024 and contributed C$50.8 billion to GDP.

Better data matters because Canada’s tourism industry is fragmented across provinces, territories, municipalities, destination organisations, small businesses and large operators. Without credible data, investment decisions become anecdotal. With better data, Canada can identify high-yield source markets, underperforming destinations, seasonal gaps, accommodation needs, labour constraints and event opportunities more accurately.

Overall, Canada’s recent tourism and hospitality developments show a sector with strong domestic momentum, improving GDP contribution, large foodservice activity, and meaningful policy attention. The weakness is international demand volatility, especially tied to the U.S. market. The opportunity is to convert Canada’s natural and cultural strengths into a more year-round, higher-yield, globally competitive visitor economy.

Government Initiatives

Canada’s central federal tourism policy is Canada 365: Welcoming the World. Every Day — The Federal Tourism Growth Strategy. The strategy is designed to move the sector from recovery to long-term growth, strengthen Canada’s international competitiveness, improve hospitality services, support workers, invest in infrastructure, and protect environmental assets.

The strategy has five stated strategic priorities: investing in Canada’s tourism assets, embracing recreation and the great outdoors, partnering to grow Indigenous tourism, attracting more international events, and improving coordination through a Federal Ministerial Council. These priorities are directionally sensible because Canada’s tourism potential depends on assets, experiences, events, workforce, infrastructure and coordination rather than only marketing.

The strategy also sets measurable 2030 targets. Canada aims to increase tourism’s contribution to GDP by 40%, from C$43.6 billion in 2019 to C$61 billion in 2030. It also estimates that this would mean an additional 85,000 direct jobs, taking direct tourism employment from 704,100 in 2019 to 790,000 in 2030.

Another target is to improve Canada’s international standing. The strategy aims to restore Canada’s ranking on the World Economic Forum Global Travel and Tourism Development Index from 13th in 2021 to 7th by 2030. The strategy notes that this ranking depends on factors such as price competitiveness, transportation infrastructure, cultural resources, non-leisure resources, tourism demand and environmental sustainability.

The government’s focus on coordination is important. Tourism does not sit neatly inside one ministry or one policy area. It depends on airports, visas, border services, parks, infrastructure, labour, immigration, Indigenous relations, small-business support, environmental policy, transportation, public safety, culture, trade and regional development. The federal strategy proposes a Ministerial Tourism Growth Council to align policy and improve whole-of-government coordination.

Destination Canada also plays a central role in Canada’s tourism system. It provides market intelligence, tools and resources to help the Canadian tourism industry reach domestic and international markets. It focuses on markets where Canada’s tourism brand leads and where returns on investment are strongest.

Destination Canada’s value-of-tourism work frames the sector as an economic driver, service export, tax contributor and regional development tool. It states that tourism generated C$130 billion in direct visitor spending in 2024, powered a C$263 billion economic footprint, and has the potential to reach C$160 billion in direct annual revenue by 2030 if forecast growth is achieved.

The federal strategy’s emphasis on Indigenous tourism is especially significant. It identifies Indigenous tourism as a major growth opportunity and links it to reconciliation, cultural preservation, entrepreneurship and community economic development. The strategy references a C$20 million Indigenous Tourism Fund, a minimum C$50 million Tourism Relief Fund Indigenous tourism priority, and broader Indigenous business and infrastructure supports.

This policy direction is strategically sound, but implementation quality will determine the outcome. Indigenous tourism should not be treated as a decorative subcategory of Canadian tourism. It requires community ownership, cultural authority, long-term capacity building, patient capital, infrastructure, training, market access, and protection from cultural misuse.

Outdoor recreation is another major policy priority. The federal strategy discusses recreational tourism, natural spaces, visitor dispersal, seasonal diversification and a Trails Tourism Strategy intended to position trails as important assets in Canada’s outdoor experience economy.

This is commercially relevant because Canada’s outdoor assets are globally recognisable. But nature-based tourism must be managed carefully. Trails, parks, mountain regions, lakes, coastlines and rural destinations can suffer from overcrowding, waste, ecological damage, seasonal congestion and local housing pressure if growth is not managed.

Festivals and events are also explicitly supported. The strategy describes festivals and events as integral to tourism because they attract domestic and international visitors and strengthen Canada’s cultural presence. This is important for extending demand beyond peak leisure seasons and for supporting city hotels, restaurants, transport providers, venues and cultural businesses.

Sustainability is embedded in the strategy’s broader framework. The government links tourism to Canada’s climate commitments, the 2030 Emissions Reduction Plan, net-zero objectives and sustainable development goals. It also acknowledges that tourism businesses, many of which are small businesses, need practical support to reduce waste, water use and energy consumption while continuing daily operations.

This matters because sustainability in Canadian tourism is not only a reputational issue. It affects asset protection, insurance, infrastructure resilience, community acceptance, Indigenous stewardship, visitor safety and the long-term viability of natural destinations.

The federal government also recognises the importance of better tourism data. The strategy states that the Tourism Data Collective, led by Destination Canada, will provide relevant tourism information and intelligence to help monitor and evaluate progress. This is a useful step because tourism decisions often suffer from fragmented data across provinces, cities and operators.

The main risk with Canada’s government initiatives is not strategic direction. The priorities are broadly correct. The real risk is execution: fragmented federal-provincial-municipal responsibilities, slow infrastructure delivery, uneven labour access, limited small-business capacity, inconsistent regional marketing, environmental pressure, and overreliance on headline funding announcements rather than measurable destination outcomes.

Canada’s tourism and hospitality industry has strong foundations. It has globally recognisable landscapes, multicultural cities, a credible destination brand, a resilient domestic market, important foodservice scale, Indigenous tourism potential, and a policy framework aimed at long-term growth. But Canada’s next stage requires sharper execution. The country needs to increase international yield, reduce U.S. market overdependence, improve year-round demand, invest in workforce and infrastructure, protect natural assets, and make destination development commercially and environmentally durable.

The opportunity is clear: Canada can become a more competitive, higher-value, year-round tourism economy. The constraint is equally clear: natural beauty and national brand strength are not enough. The industry has to convert assets into consistent visitor experience, reliable hospitality operations, and measurable economic outcomes.