How Will Canada Overcome Geopolitical Challenges to Reclaim Its Top 10 Tourism Spot?

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Canada’s post-pandemic tourism targets are both ambitious and challenging. The country is striving to reclaim its place among the world’s top 10 tourist destinations by 2030, having fallen to 13th place in 2021 on the World Economic Forum’s Travel and Tourism Development Index. While it had improved to 11th by 2024, the federal government’s target is to reach seventh place by the end of the decade. Additionally, Canada aims to boost annual tourism revenues from $140 billion to $160 billion and increase the tourism sector’s contribution to the nation’s GDP by 40%.

Strategic Challenges

Despite these lofty goals, experts indicate several obstacles. Frederic Dimanche, the director of the Ted Rogers School of Hospitality and Tourism Management at Toronto Metropolitan University, highlighted that the index measures more than just visitor numbers. Criteria such as safety, security, quality of transport infrastructure, and the attractiveness of natural and cultural resources also play significant roles. Dimanche noted that Canada needs to improve on these fronts while also keeping an eye on how other countries are performing.

Geopolitical and Economic Hurdles

The strategy to reach these targets, released by Destination Canada in June, includes identifying target audiences, branding Canada, attracting more business events and conventions, increasing labor supply, and maintaining environmental sustainability. One key market is East Asia, including China. However, strained Canada-China relations pose significant challenges. China has not yet reinstated Canada on its list of approved tours, impacting group tours to Canada significantly. This situation is out of Canada’s control but has severely affected operators reliant on Chinese tourists.

Impact of Global Conflicts

Overseas conflicts also influence commercial air routes to Canada, affecting both availability and cost. While domestic travel within Canada and outbound travel by Canadians have rebounded post-pandemic, inbound international travel has not returned to pre-pandemic levels. RBC economist Claire Fan, in a recent report, pointed out that there remains a 10% gap, primarily due to reduced visitors from East Asia, including China, Japan, and South Korea.

Local Tourism Operators’ Struggles

Tour operators, like Etienne Cameron of Lady Dive Tours in Ottawa, echo these observations. Cameron remarked that the Asian market has not returned to its former strength, with Canada’s exclusion from China’s approved list being a major setback. He suggested that Canada should focus on building relationships with other countries to diversify its tourism base.

Economic Contribution and Job Market

Tourism is a significant economic driver in Canada, supporting 1.9 million jobs across the country. It’s an industry that surpasses the automotive, agriculture, and fisheries sectors in economic impact. However, other geopolitical tensions, such as those with India and the reinstatement of visa requirements for Mexican visitors, further complicate Canada’s tourism aspirations.

High Travel Costs and Infrastructure

The high cost of travel within Canada remains a significant barrier. The lack of rapid rail and limited airline competition make domestic travel expensive. Martinez Ferrada, a government representative, highlighted the need for further investment in transportation infrastructure to make domestic travel more competitive. Ferrada pointed out that if traveling within Canada costs as much as going to Paris, potential tourists might opt for Paris due to its perceived value, despite the high cost of staying there.

Potential Growth Areas

The government is optimistic that immigration trends might boost family and friend visits from overseas. There is also increasing interest in Indigenous-based tourism, which could attract more international visitors. However, the escalating impact of climate change poses a new set of challenges for the tourism sector. Wildfires, for instance, can tarnish Canada’s reputation as a travel destination when global media portrays the country as being ablaze, even if only certain regions are affected.

Climate Change Considerations

Climate change introduces new complexities for the tourism sector. As Martinez Ferrada noted, the industry must now consider how to handle climate-related emergencies, such as evacuations during wildfires. However, climate change could also extend the tourist season in some regions, like Ottawa, where a longer unfrozen river season benefits the Lady Dive Amphibus tours.

Future Prospects

Despite these challenges, there is cautious optimism among tourism operators. Cameron believes that Canada needs to strengthen its international relations and invest more in tourism promotion to showcase the country’s unique offerings. The global effects on travelers will hinge on how well Canada navigates these geopolitical, economic, and environmental challenges. If successful, Canada could once again become a top-tier destination, attracting a diverse and growing number of international visitors.