US travelers and a weaker Canadian dollar could fuel a tourism boom in 2025, with international demand rising while domestic travel faces economic challenges.
Tourism plays a crucial role in Canada’s economy, with various sectors contributing to its overall impact. Transport accounts for approximately 21% of the industry’s economic input, accommodations make up 27%, food and beverage services add 16%, and recreational activities contribute around 36%. Altogether, tourism represents about 1.55% of the country’s GDP. As of the first three quarters of 2024, the sector employed nearly 669,000 Canadians, equating to roughly 3.3% of the nation’s workforce.
Tourism demand in Canada stems from both domestic and international travelers. Given the country’s proximity to the United States, it’s no surprise that American visitors dominate the scene. In 2023, they made up nearly 78% of all foreign arrivals. However, their spending only accounted for about 50.7% of the total, likely because many opt for brief day trips. Ontario remained the most popular destination, welcoming around 47% of international visitors between January and November 2024, followed by British Columbia and Quebec. While international tourism is significant, domestic travelers still drive about 76% of the industry’s revenue.
Looking ahead to 2025, the outlook for Canadian tourism remains cautiously optimistic. Prior to the pandemic, the sector enjoyed consistent growth for over a decade. While travel has largely recovered, it has yet to reach pre-pandemic levels, leaving room for potential expansion. A major factor influencing tourism trends is currency fluctuation. A weaker Canadian dollar makes the country more attractive to foreign visitors, particularly Americans, as their purchasing power increases. On the flip side, a devalued currency raises costs for Canadians traveling abroad, often prompting them to explore domestic destinations instead.
Historically, a stronger U.S. dollar has correlated with increased spending by foreign visitors in Canada. At the same time, when the exchange rate favors the American greenback, fewer Canadians travel outside the country. However, tourism activity within Canada is influenced by broader economic conditions rather than just currency shifts. Even if a weaker Canadian dollar makes overseas travel less appealing, domestic spending on tourism ultimately depends on the state of the national economy.
As 2025 unfolds, the industry may see an uptick in international visitors, helping to offset any slowdown in local travel. While economic uncertainties could make Canadians more cautious about discretionary spending, an influx of foreign tourists—encouraged by favorable exchange rates—might provide the sector with a much-needed boost. The road ahead remains uncertain, but there’s reason to be hopeful for a resurgence in Canada’s tourism industry in the coming year.
The post US Tourists To Drive Canada’s Biggest Tourism Comeback In 2025 As A Soft Canadian Dollar Turns Travel Into A Bargain appeared first on Travel And Tour World.
