Canada’s Tourism Recovery Hurt by China Group Travel Ban

Canada won’t surpass its pre-pandemic international tourism level until 2025. One of the reasons is the lagging recovery of Asia, according to Destination Canada’s outlook report. That’s due in part to the Chinese government’s ban on group travel into Canada. 

“As that lifts, we’ll be in a better position,” said Meaghan Ferrigno, chief data and analytics officer for Destination Canada.

China has yet to lift its ban on group travel to Canada. In August, the Chinese government lifted it for the U.S., UK , and multiple other countries.

“What we’ve seen in the past, when those lift, the market returns very quickly,” said Ferrigno.

At $2.1 billion, China was Canada’s top tourist spending nationality in 2019. In terms of long-haul arrivals, it was second only to the UK.  

Destination Canada is currently marketing to individual Chinese travelers. “We aren’t marketing group travel at this time,” said Ferrigno.

China is expected to fully recover its spending in Canada at $2.1 billion in 2026. Japan and South Korea are expected to come back sooner than China in 2025.

The U.S. and UK both expect Asia to make a slow recovery.

Tourist Spending Rebounds from Other Countries

While Asia continues to lag for Canada, some countries have either exceeded or were close to reaching their pre-pandemic level. Spending from the U.S. and Mexico will reach $11.2 billion and $754 million, both exceeding their 2019 levels. 

Canada’s top markets — the UK, France and Germany — will exceed their pre-pandemic level in 2024. Australia spending should also recover.

Canada’s Tourism Recovery

• Domestic travel spending exceeded pre-pandemic levels. Canadian travelers spent $82 billion in 2023.

• The recovery is uneven. A large share of Canadian tourism businesses are at risk of shutting down. “When you pull back without having two years of revenue, that created significant debt loads,” said Ferrigno. “We now have these inflationary pressures that are eroding the bottom line profitability of our businesses.”

• Business travel spending to come back next year. Destination Canada expects business travelers will spend $14.4 billion in 2024, 102% of its pre-pandemic level.
  
• Event travel recovery will take four years. Corporate meetings, association conferences and other business travel events will fully recover by 2028.