Home » Australia Travel News » US, Mexico, UK, France, Germany, and Australia Drive Significant Declines in Canada’s Tourism Sector in 2025 as Global Travel Behavior Shifts and Geopolitical Tensions Escalate: Get the Latest Insights
Sunday, July 27, 2025
In 2025, Canada’s tourism sector is experiencing a significant downturn, largely driven by declines in visitor numbers from key markets including the US, Mexico, the UK, France, Germany, and Australia. This drop can be attributed to a combination of shifting global travel behavior and escalating geopolitical tensions, both of which have caused international travelers to reassess their destination choices. As global uncertainties rise, tourists are increasingly cautious, leading to a sharp reduction in travel to Canada from these major countries. The latest insights reveal how these global shifts are reshaping Canada’s tourism landscape and contributing to a challenging year for the industry.
A primary factor contributing to this drop is the reduction in visitors from the United States. The number of American travelers to Canada has been particularly affected, with air travel seeing a 15% decline, and travel by car plummeting by over 30%. This sharp decline in American visitors is mirrored by Canadian reluctance to travel to the United States. However, while Canadian travelers have been staying away from the US in large numbers, the decline in US visitors to Canada is somewhat less severe. From January to May 2025, the number of US overnight arrivals decreased by 5%, totaling 3.8 million visitors. While overall arrivals have dropped, air travel from the US increased slightly by 1%, though land-based arrivals saw a notable decrease of 7%.
In addition to the US, Canada’s tourism data also shows declines from several other important markets. France and Germany, two of Canada’s largest European tourism sources, both saw a 6% decrease in overnight arrivals from January to May. Mexican visitors to Canada faced a steeper decline, with arrivals plummeting by 18%. The UK and Australia, both significant markets, showed no growth in the number of visitors during this period.
On a more positive note, Canada’s tourism industry has remained resilient in Northeast Asia. Countries such as China, Japan, and South Korea have shown an uptick in travel to Canada. From January to May 2025, China saw a 4% increase in visitors, Japan had a 6% rise, and South Korea recorded a 7% growth in overnight arrivals. This growth from Northeast Asia is a strong contrast to the negative trends observed in other regions, reflecting the continued popularity of Canada among these countries.
Despite this positive growth from Northeast Asia, the overall picture is concerning. Data shows that the rest of the world experienced a significant decline in overnight arrivals, with a 12% drop, leading to 824,900 fewer visitors overall. This highlights the broader challenges faced by the Canadian tourism industry, which is struggling to maintain its position in a highly competitive global market.
Geopolitical instability is widely viewed as a major factor behind the decline in international travel to Canada. Global political tensions and safety concerns have influenced travel behavior, with tourists opting for destinations perceived as safer or less politically volatile. This shift in global travel patterns is part of a broader trend impacting numerous countries, with Canada experiencing its own version of this global caution.
Despite these challenges, tourism remains a vital contributor to Canada’s economy. In 2024, the tourism sector was one of the fastest-growing in the country, contributing an impressive US$37.1 billion (C$50.8 billion) to the national GDP. This figure accounts for 1.8% of Canada’s total GDP, underscoring the importance of tourism to the country’s economic health. Additionally, tourism grew by 3.6% in 2024 when adjusted for inflation, surpassing the overall national GDP growth rate of 1.7%.
Moving forward, Canada’s tourism industry will likely focus on strategies to restore international confidence and attract more visitors from key markets. While the decline in tourism numbers is concerning, the industry’s substantial contribution to the economy suggests that tourism will continue to be a critical sector for Canada’s growth. The ongoing economic significance of tourism, coupled with the resilience of key markets like Northeast Asia, will be essential as the country works to recover from these recent declines.
In summary, Canada’s tourism sector has encountered significant challenges in the first part of 2025, with declines in major markets like the US, Europe, and Mexico. Geopolitical uncertainty and changing global travel patterns have contributed to the downturn, but the growth from Northeast Asia and the continued economic value of the tourism sector highlight the industry’s potential for recovery. The Canadian tourism sector remains a crucial economic driver, and efforts to adapt to shifting global travel trends will be key to regaining momentum in the coming years.
