Canada’s Travel Industry Revenue Hits $18.3B despite U.S. Decline

Canada’s travel arrangement and reservation services industry continued to grow in 2025, with operating revenue reaching $18.3 billion despite the decline in Canadian travel to the United States.

Data from Statistics Canada, released Oct. 5, shows operating revenue across travel agencies, tour operators and other travel arrangement and reservation services rose 8.8 per cent in 2025, following growth of 9.3 per cent in 2024.

Revenue was 24.9 per cent higher than in 2019, outpacing the 20.7 per cent increase in the Consumer Price Index over the same period.

Travel agencies generate $3B

Canada’s travel agencies generated $3.0 billion in operating revenue in 2025, an increase of 3.8 per cent year over year, reports StatCan

Operating expenses increased slightly faster, rising 4.0 per cent to $2.6 billion, while the industry’s operating profit margin edged down from 14.5 per cent in 2024 to 14.3 per cent last year.

Salaries, wages, commissions and benefits represented 51.0 per cent of travel agency expenses.

Airline seats remained the biggest source of sales revenue for agencies, accounting for 35.0 per cent of the total, followed by packaged tours at 25.2 per cent.

International travel beyond the United States was particularly important to the agency sector. Trips to international destinations other than the U.S. generated 60.8 per cent of travel agency revenue in 2025.

The figures come as Canadians continue to shift some of their travel away from the United States.

The number of return trips from the U.S. by Canadian residents fell 25.4 per cent year over year in 2025, extending what Statistics Canada described as a series of 11 consecutive months of declines.

By the end of the year, U.S. trips represented two-thirds of all Canadian return trips from abroad, compared with three-quarters in 2024.

Tour operators lead industry growth

Tour operators remained the largest component of Canada’s travel arrangement and reservation services industry, generating 60.3 per cent of total sales in 2025, up 1.2 percentage points from 2024.

Operating revenue among tour operators jumped 10.9 per cent to $11.0 billion, while operating expenses increased 10.5 per cent to $10.7 billion.

The industry’s operating profit margin consequently improved from 2.5 per cent in 2024 to 2.9 per cent in 2025.

Packaged tours accounted for 63.2 per cent of tour operator sales revenue, while group tours represented another 21.0 per cent. Together, the two categories generated more than four-fifths of tour operator revenue.

Foreign destinations outside the United States accounted for 82.7 per cent of all destinations, further highlighting the importance of long-haul and non-U.S. international travel to the sector.

The cost of goods sold represented 84.3 per cent of tour operator expenses.

Other travel services grow 7.1%

Other travel arrangement and reservation services, a category that includes businesses such as automobile clubs, ticket service companies and travel wholesalers, recorded $4.2 billion in operating revenue in 2025.

That represented growth of 7.1 per cent, moderating from the 12.3 per cent increase recorded in 2024.

Operating expenses climbed 8.1 per cent to $4.0 billion, outpacing revenue growth and putting pressure on profitability. The segment’s operating profit margin fell 0.8 percentage points to 5.7 per cent.

U.S. travel drop continues into 2026

Statistics Canada’s preliminary travel figures suggest the shift away from U.S. travel continued into the first half of 2026, although at a considerably slower pace.

From January through June, Canadian-resident return trips from the United States declined 4.6 per cent compared with the same period in 2025.

Air travel from the U.S. fell 8.5 per cent, while return trips by land declined 2.6 per cent, StatCan reports.

Meanwhile, Canadian return trips from countries other than the United States increased 4.8 per cent during the first six months of the year.

Statistics Canada said the decline in U.S. travel is likely to dampen tourism activity because U.S. travellers represent a significant share of the clientele for many businesses within the broader travel arrangement and reservation services industry.

Financial estimates for 2026, scheduled to be released next year, will provide a clearer picture of the impact.