Canada, United States, Europe, Navigate a New Era of Tourism as Canadian Domestic Demand Surges Beyond Expectations
Canada, the U.S. and Europe are experiencing a tectonic shift in global tourism trends, much of it linked to Canada’s booming domestic travel market. As international visitation remains spotty and cross-border travel fluctuates, Canadians are looking inward, resulting in an unprecedented level of spending on local tourism. The country is leading the broader trend in which internal growth can now exceed that of imports and exports, according to the firm, with estimated domestic spending set to reach nearly CAD 104 billion by 2025, more than double the 2019 growth rate. Political sensitivities, changing traveler behaviors and altered itinerary preferences — particularly from tourists who once combined U.S. and Canadian visits — are driving all three regions to adjust tactics and revamp tourism priorities in this altered travel age.
One of the main forces driving this surge is the strength of the domestic travel market. With Canadians showing a growing preference for exploring their own country, domestic visitor spending is forecast to reach close to CAD 104 billion in 2025. This figure represents more than twice the annual growth recorded in the previous year, demonstrating a clear upward trajectory in local travel demand.
While the domestic side of tourism continues to thrive, cross-border travel between Canada and the United States remains in a state of flux. Once the dominant destination for Canadian travelers, the U.S. is seeing a decline in outbound trips from Canada. Historically, more than half of international travel by Canadians was directed toward their southern neighbor. Recent data, however, shows a noticeable drop in such visits—reflecting both changing traveler preferences and broader international dynamics.
On the inbound side, Canada is also experiencing a dip in visitation, particularly from the United States, which has long been its largest source market for international travelers. Fewer Americans are crossing the border into Canada, contributing to an overall cooling of international arrivals. Several factors are influencing this trend, including evolving global travel behavior and changing regional perceptions that are reshaping how travelers plan their journeys.
Another notable trend is the decreasing number of international visitors who once included both Canada and the U.S. in a single itinerary. In the past, travelers from Europe, Asia, and other regions would often visit both countries during one trip. However, due to recent political sensitivities and logistical complications, some of these travelers are now choosing to avoid the region altogether—resulting in lost tourism opportunities for Canada.
Despite these short-term challenges, the outlook for Canadian tourism remains positive over the long term. Forecasts stretching to 2035 suggest the sector could contribute over CAD 233 billion to the national economy, represent 6.3 percent of Canada’s GDP, and support more than 2.1 million jobs. Much of this projected growth is expected to come from a steady rise in domestic spending, alongside efforts to enhance international competitiveness.
To sustain momentum, stakeholders across the tourism industry are encouraged to prioritize investment in key areas such as infrastructure, seamless digital access, marketing innovation, and visitor satisfaction. Ensuring hassle-free entry experiences and promoting lesser-known destinations can help Canada diversify its appeal while easing pressure on major tourism hubs.
The evolving landscape of travel behavior also calls for smarter engagement strategies, including data-driven promotion and experiences tailored to shifting traveler expectations. Creating frictionless and memorable journeys will be essential to competing with global destinations that are also vying for a share of post-pandemic tourism recovery.
Canada’s geographic diversity, cultural richness, and natural beauty provide a solid foundation for long-term tourism development. However, sustaining growth requires proactive planning and responsiveness to international developments. By embracing change and fostering innovation, the Canadian travel industry can continue to lead as a high-performing and globally admired sector.
In sum, 2025 is destined to go down as a pivotal year for Canadian tourism. With an increase in domestic travel and a clear plan for the future, the nation is on track to develop an integrated, resilient, and inclusive tourism economy that can work for Canadian communities to help support them for year to come.
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