Canada’s tourism sector faced a downturn in the third quarter of 2024, as spending dropped and key indicators pointed to a slowdown in international travel. According to the latest data from Statistics Canada, tourism spending declined by 0.3% during the quarter, reversing the 0.6% growth seen in the second quarter. The decline marks a continued trend of fluctuating tourism numbers as global travel recovery faces new challenges.
One of the most significant contributors to the downturn was a 2.7% drop in tourism spending from foreign visitors. The decrease in foreign tourism demand is linked to a reduction in international travel to Canada, with overnight stays falling by 3.4%. Spending on accommodation services, which is traditionally a large portion of foreign tourists’ budgets, saw a sharp decline of 3.5%. Similarly, food and beverage services and passenger air transport recorded respective decreases of 3.3% and 2.8%.
As foreign visitors typically allocate a larger share of their spending to accommodation compared to domestic travelers, this dip had a pronounced effect on tourism-related revenues. In the third quarter, non-residents accounted for 27.2% of tourism spending on accommodations, nearly double the 14.1% spent by Canadian residents.
In contrast, domestic tourism showed some resilience, with a 0.5% increase in overall spending. This was primarily driven by an uptick in pre-trip expenses, such as purchases of recreational vehicles and camping equipment, which rose by 3.6%. Other categories, including vehicle fuel, food services, and passenger air transport, also saw moderate increases.
However, the positive growth in domestic tourism spending was tempered by a decrease in accommodation services, which fell by 1.9%. Despite this, domestic travel contributed positively to the overall tourism expenditure, offering a partial cushion against the decline in international travel.
Tourism’s gross domestic product (GDP) also contracted, falling by 0.6% in the third quarter. The decline was driven largely by a 2.6% decrease in accommodation services, which weighed heavily on the sector’s overall performance.
While the broader economy showed modest growth—real GDP by industry increased by 0.3%—the tourism sector underperformed. As a result, tourism’s share of the national GDP slipped to 1.53% in nominal terms.
Tourism-related employment in Canada remained stable during the third quarter, with the number of jobs linked to tourism unchanged from the previous quarter. Despite some fluctuations in specific sectors, such as a 1.3% decline in accommodation services, job growth in non-tourism industries, travel services, and air transportation helped to offset these losses. Overall, tourism jobs continued to account for 3.31% of all employment in Canada.
For now, the third-quarter results underline the volatility of the tourism industry, influenced by shifting global travel patterns and changing consumer preferences. With foreign tourism struggling to regain its pre-pandemic levels, Canada’s tourism sector faces an uncertain path ahead.