Tourism season off to a wobbly start

 2025 Summer tourism through the small business lens 

Main takeaways:

• One-third of all businesses rely on summer tourism for their revenues.
• About two-thirds of tourism businesses expect their 2025 revenues to be the same as in 2024.
• Three-in-five firms say that the Canada-US trade situation is hurting their business.
• Operators are noticing some changes in consumer behaviour such as more interest from Canadian tourists and preference for lower cost options.
• Consumers attest to being more interested in travelling within Canada.

Tourism is a big deal in Canada, especially for small and mid-sized businesses. Tourism businesses represent about 6% of all businesses in Canada¹ and 99.9% of them are small and medium-sized firms². Tourism businesses employ about 10% of all working Canadians¹, and account for over 2% of GDP².

Overall, one third of all businesses rely on summer tourism for their revenues. In Atlantic and British Columbia, summer tourism is even more important – 46% of SMEs rely on it for their revenues. 

Figure 1

Summer revenues can make or break a business. This year, two-thirds of tourism operators expect summer revenues to be about the same or even lower than last year, despite operational costs being higher and inflation still present.

While revenue data at firm level is not yet available for 2024, it is expected that it has trended slightly upwards but it hasn’t reached yet its pre-pandemic level. The travel industry surged in 2022, fuelled by the easing of pandemic-related travel restrictions, but growth normalized in 2023. Despite making progress, the industry is still catching up to pre-pandemic levels of activity, with resident and non-resident tourism spending in constant dollars lagging 2019 levels.³

From the individual's perspective, half of Canadians with travel plans say they are planning on spending about the same as last year, 25% say their travel budget is higher this year than it was last year, while 21% say their budget is lower. 

Figure 2

“…guests have asked for refunds as they are being affected by tariffs with their jobs and/or livelihoods and can't afford vacationing, and our American guests are nervous about cross border travelling and some have cancelled outright .”

Ontario, tourism operator

Trade tensions with the U.S. are adding to the uncertainty. Three-in-five firms say the current U.S.-Canada situation is hurting their business—similar to what we see across other sectors.

Figure 3

New trends in the industry: the consumer's perspective

New data from a public opinion poll conducted by CFIB with members of the Angus Reid forum shows that so far, 22% of Canadians have already canceled their personal travel to the US, while a further 11% have reduced their travel. Among Canadians who had personal travel plans to the US, 46% have canceled their travel, and 24% have reduced their travel.

Furthermore, 10% of Canadians have canceled their business travel plans to the US, and a further 5% have reduced their business travel. Among Canadians who had business travel plans to the US, 38% have canceled and 20% have reduced their travel.

Figure 4

Two-thirds of Canadians have travel plans for the upcoming summer, with 40% having already finalized their travel plans. Among Canadians with travel plans for the summer, more than half (55%) report planning to travel within their province, and 52% report planning to travel to other provinces within Canada. One-fifth have plans to travel elsewhere in the world outside of Canada and the US, while only 11% have plans to travel to the US.

Figure 5

Most Canadians are planning on travelling within Canada, either in their own province or visiting other provinces. 

Figure 6

New trends in the industry: the business owner's perspective

About 2 in 5 business owners noticed some changes in the patterns of tourism consumers so far. In fact, almost 60% noticed more interest from domestic consumers, and 37% noticed consumers choosing lower cost options. Other changes are a decrease in booking, trips of shorter duration, and slightly more interest form international tourists. 

Figure 7

What can governments do

In an open-ended question on what and how can governments help the tourism industry, CFIB received feedback from 247 businesses from across the country. We have grouped the responses using a private account for an Artificial Intelligence (AI) tool.

These recommendations include calls to reduce businesses taxes, fuel and carbon taxes, and taxes on consumers to boost spending. 

Sample topics covered: Eliminate carbon tax, lower gas and transportation costs, reduce business operating expenses, and increase households’ disposable income.

Governments should encourage Canadians to travel within Canada and discover local destinations. These promotions can also include marketing Canada to tourists outside the country.

Sample Topics: promote Canadian-owned accommodations, encourage shop-local culture, staycations, interprovincial tourism, explore-your-own-region campaigns, and national park incentives and rebates, targeting rural areas, messaging that Canada is open to visitors.

Suggestions to ease tensions and resolve trade issues with the U.S.

Sample Topics: end retaliatory tariffs, improve cross-border cooperation, leverage favorable exchange rate, reassure U.S. visitors that they are welcome.

4. Reduce red tape and government overreach
Simplify regulations, reduce bureaucracy, and limit political interference.

Sample Topics: faster licensing (e.g., patios), less government micromanagement, simplified municipal, provincial and federal rules.

Monitor inflation and evaluate the implications of cost increases on consumers and business owners, maintain and upgrade infrastructure, implement strategies to boost consumer confidence.

Sample Topics: minimize construction disruptions, prepare in advance for potential wildfires, and assess inflation's impact on tourism budgets

Infographic by Bernice Balano, Data Visualization and Design Intern at CFIB.

FOOTNOTES

¹ ISED, Canada, SME Profile: Tourism Industries in Canada, 2020 , accessed on June 11, 2025. 

² Tourism HR, Canada, Small and Mighty: Implications of Tourism Business Sizes, accessed on June 11, 2025. 

³ Statistics Canada, Shifting Economic Conditions Impact Service Industries in 2023. accessed on June 11, 2025. 

METHODOLOGY 

CFIB's research is based on members’ views, which are collected through various controlled-access member surveys using a one-member one-vote system. CFIB produces clear, credible, and compelling analysis that supports the success of independent business in Canada. CFIB membership has good representation across regions, sectors, and business sizes; hence the survey data offers a reasonable estimate of the distribution of economic activity across Canada.

CFIB Public Opinion Poll, June 6-9, online, 1,501 responses received from adult Canadians members of the Angus Reid Forum. The poll was conducted in English and French. For comparison purposes, a probability samples with the same number of respondents would have a margin of error of +/-2.5%, 19 times out of 20. 

CFIB Your Voice survey, May 6 - June 2, 2025. 2,190 responses from owners of Canadian independent businesses, from all sectors and regions of the country. For comparison purposes, a probability samples with the same number of respondents would have a margin of error of +/-2.1%, 19 times out of 20.