Canada Tourism Levels on Track To Exceed 2019 but Challenges Remain

by Mia Taylor
Last updated: 4:10 PM ET, Tue December 12, 2023

Tourists are returning in droves to Canada, exceeding levels seen in 2019 prior to the outbreak of the global coronavirus pandemic.

Destination Canada’s just released Tourism Outlook report shows that total tourism revenue is on target to exceed 2019 and reach $109.5 billion by the end of this year. That figure is also notable because it marks a recovery for the country’s tourism industry one year ahead of what experts had been predicting.

Additionally, there may be opportunity for Canada's tourism sector growth to reach a record $160 billion in revenue by 2030.

“Despite tourism coming to a standstill in 2020, the industry, post recovery, is expected to grow faster than the general economy at 5.8 percent, reflecting its resilience and importance to the economic vitality of the country,” says the report.

A deeper dive into the data, however, shows that the country's travel industry’s recovery varies by region and sub-sector. In addition, capacity constraints may be limiting the sector from achieving its full, projected potential over the coming years.

“A transformational path must be embraced. Without change, tourism will move forward along its long-term trajectory where constraints will limit its potential to $140 billion, which when adjusted for inflation, shows no real growth,” adds the report.

There are several steps or “key levers” that can bolster Canada's competitiveness and address its constraints in order to help it achieve the potential $160 billion revenue mark, says the report. Those levers include:

Workforce development
Unleashing capacity outside of peak season
Attracting higher yield guests
Increasing air access
Bolstering new investment and reinvestment in the sector

"At this critical juncture, we face a clear choice," Meaghan Ferrigno, Destination Canada's chief data and analytics officer, said in a statement. "The difference between $160 and $140 billion is about more than revenue. It's about unleashing capacity when and where we have it, it's about creating stable employment and enhancing societal well-being. And importantly, it's about smart growth that drives real prosperity for tourism businesses across every corner of this country."

Key Takeaways for Destination Canada's Future

Tourism revenue will exceed pre-pandemic levels in 2023: Amid inflationary headwinds, tourism spending will exceed pre-COVID-19 levels in 2023, reaching $109.5 billion. Domestic activity has led revenue recovery and is on track to reach 104 percent of 2019 levels by the end of 2023.
Opportunities constrained by capacity: Opportunities for growth prevail but challenges persist in the fiercely competitive global marketplace where all destinations are vying to attract travelers. Demand for travel is projected to grow by 30 percent by 2030 and will outpace Canada’s capacity to host in peak seasons, limiting Canada's growth potential.
$160 billion potential: The report identifies a $160 billion revenue potential for the tourism industry by 2030, but only if a transformational path is taken that addresses constraints and shifts demand to change how growth occurs.
Closing the $20 billion opportunity gap: Destination Canada proposes a transformative path to secure an additional $20 billion in annual revenue by 2030, driving real prosperity for tourism businesses across the country and contributing a 14% increase in GDP generated by tourism, 84,000 more jobs and $5.3 billion more in tax revenue for all levels of Government
Transformational path: Industry transformation has the potential to close the $20 billion opportunity gap but it will require sector-wide collaboration on seven key levers including revenue and yield growth, brand leadership, investment, access, workforce and digital readiness, environmental sustainability and support from Canadians.

"This is a truly pivotal moment for our industry. The opportunity between our transformational growth agenda and the current continuous path is one that we cannot afford to lose. We need to choose collective action to overcome the constraints that hold us back from unlocking the true potential of the tourism sector," sDestination Canada's President and CEO, Marsha Walden, said in a statement. "If we work together, we can achieve what's possible and recapture our position