Canada is one of the most desirable travel destinations, and is a land of open, scenic landscapes, pure water, a mosaic of cultures, and spectacularly friendly people. Tourism is at the heart of many communities from coast to coast in Canada.

Canada’s Travel and Tourism Industry

Tourism significantly contributes to Canada’s economy, representing more than CA $45 billion and over 2% of its GDP in 2019. This sector powers essential services like dining, transportation, lodging, leisure, and travel. 

Despite the pandemic’s impact on Canadian tourism and hospitality during 2020-2021, the industry is bouncing back with resilience. In the first quarter of 2023, tourism expenditure exceeded its pre-pandemic benchmark, achieving 106% of what was spent in Q1 2019 (without adjusting for inflation). Domestic tourism was at the forefront of this growth, hitting 109% of what was spent in 2019. International tourism spending is also on an upward trajectory, hitting 95% of what was spent in 2019 during Q1 2023.
Reinforcing the positive uptick, the 2023 Economic Impact Research (EIR) by the World Travel & Tourism Council says that Canada’s tourism industry is poised to contribute CA $162.6 billion into the economy. This marks a 17.2% increase from the previous year and is nearing pre-pandemic levels of CA $173.9 billion recorded in 2019.

Tourism Facts in Canada

• 25 million + Non Resident visitors entered Canada between July 2022 and July 2023
• Of this approximately 75.66% were US residents, making the US the biggest tourism customer of Canada
• UK, India, and France are the next top 3 overseas visitors by country of residence
• Ontario, Quebec, and British Columbia are the top 3 most visited provinces in Canada. 42.7% of all tourists to Canada choose Ontario as their destination
• 91.6% of visitors to Canada stay overnight while 8.4% make same-day trips.
• 81.5% of visitors to Canada arrive by air

Top Travel and Tourist Destinations in Canada

• Toronto welcomes 27.5 million visitors annually, spending approximately $6.5 billion per year. Being Canada’s economic epicentre, it’s famous for its skyscrapers, museums, and theatres. Events like the Toronto International Film Festival, Toronto Raptors games, and iconic landmarks like CN Tower and the Scotia Bank Arena augment its popularity. 

• Niagara city is a globally recognized travel destination, located in Ontario, Canada. Niagara Falls, Canada’s largest casino, Niagara Wine Route, and The Shaw Festival attract over 13 million global visitors annually, contributing to a tourism expenditure of over $2 billion in the region.

• Vancouver boasts 20% of total tourist spend in Canada. This picturesque coastal city in British Columbia attracts numerous visitors annually with its pleasant weather; considered the mildest among all Canadian cities, natural parks, mountains, and bodies of water.

• Calgary is known for the Calgary Stampede and being a gateway to the Rocky Mountains and Banff National Park. Calgary’s forecast for 2023 plots around 8.2 million visitors coming to the city, estimated to bring  $3.1 billion in tourism revenue. 

• Quebec City, a UNESCO world heritage site, is consistently ranked one of the top destinations to visit in Canada. It is the birthplace of French North America and the only walled city north of Mexico. The city brings in 4 million visitors every year, spending approximately $1.63 billion in annual tourism.
• The Northwestern Territories are witnessing steady growth in Aurora viewing tourism, making up approximately 32% of the total tourism spending in the territory at  $210 million.

Travel and Tourism Business Landscape in Canada

SMEs form the cornerstone of the tourism sector in Canada, making up 99.9% of businesses within this industry. Tourism-focused SMEs span primarily across 5 central sectors: food and beverage services, recreation and entertainment, transportation, accommodations, and travel services. In 2020, out of the approximately 1.30 million SME employers in Canada, 8% were from the tourism sector.
The majority of the tourism SMEs are in F&B services, accounting for 63.8%, followed by businesses in recreation and entertainment (16.2%), accommodations (9.4%), transportation (7.1%), and travel services (3.6%).

Source: ISED

Geographically, Canada’s tourism businesses are spread across all provinces and territories with a key concentration in Ontario (35.9%) and Quebec (22.4%). Interestingly, in areas such as Atlantic Canada, Quebec, British Columbia, and Canada’s North, tourism-based SMEs exceed that of other industry-based SMEs.

Start-up Opportunities in the Travel and Tourism Industry in Canada

Canada is a top-notch destination for tourists worldwide and this makes it fertile ground for travel and tourism startups to take advantage of the sector. From technologically driven solutions to inclusive opportunities, here is an array of startup opportunities that the Canadian travel and tourism industry presents to entrepreneurs.

1. Travel & Tourism Tech

Tech Innovation in the travel and tourism industry is being embraced with open arms. Business intelligence technologies have been the most popular adoption, along with security and advanced authentication systems, as well as the Internet of Things (IoT) systems. 

Some of the top travel and tourism tech companies in Canada currently are:

Hostaway:  A Toronto based company, Hostaway is a leader in the vacation rental space, with its all-in-one vacation rental software for property managers. They recently secured a capital investment of $175 million, marking the highest funding in its sector. 

Hopper: A Montreal based travel-related financial services company, which is worth $5B. Most recently, they secured a partnership with Air Canada that gives the airline’s customers the option to purchase “Cancel for Any Reason” policies. 

Rvezy: A peer-to-peer RV rental marketplace started from Ottawa that helps RV owners rent out their RVs when they are not being used. After an appearance on Dragon’s Den, they got a $150,000 investment from Michele Romanow, and the firm’s gross sales grew to over $3 million. In 2021, they raised another $23 million in investment.

Busbud: A leading global marketplace for intercity ground travel enables travelers to quickly book bus tickets on over 3 million routes across 80 countries, supporting 30 currencies. Based in Toronto, this startup has recently merged with Betterez to accelerate their growth. 

Rocketrez: A Manitoba-based ticketing and operations platform that drives sales to tours and attractions companies and elevates the guest experience with data and insights. Earlier this year Rocketrez secured $20 million in funding.
Tourism, Technology Co: The makers of Booker and Tripper, TTC helps destination managers and tourism operators succeed with white-labeled software solutions. They recently received an investment of $715,000 from the Government of Canada to scale across North America.

2. LGBTQ+ Tourism 

LGBTQ+ tourists are widespread in Canada, because of the country’s reputation as being a safe and friendly place for the community. In the 2018 Spartacus Gay Travel Index, Canada and Sweden jointly secured the top spot. The LGBT+ Pride 2021 Global Survey highlighted that 61% of Canadian adults advocate for LGBT individuals to freely express their sexual orientation and gender identity vs 51% globally. Additionally, 48% of Canadians endorse public displays of affection by LGBT people vs 37% worldwide. And let’s not forget that Canada legalized same-sex marriage in 2005, ten years before the U.S.

This community means big business and tourism opportunities for Canada, seeing as their spending surpasses their peers by 7x per trip. Historically resilient, they are also among the earliest groups to bounce back after shocking events (SARS, 9/11, etc). Currently, 90% are actively looking for travel experiences within Canada.
The Canadian government is also fully committed to expanding this opportunity. In 2022, $487,000 was announced towards Canada’s LGBT+ Chamber of Commerce with the aim to conduct inclusion workshops to educate the tourism sector, and implement the Destination Audit program to evaluate LGBTQ2+ travel strategies.

3. Remote and Rural Tourism

The global demand for untouched destinations has never been more pronounced, and Canada is a top destination for remote tourism. Remote and rural tourism in Canada presents a burgeoning opportunity for startups, as the world looks for open spaces and vast wilderness. 
The Canadian government recognizes this potential and is keen to capitalize on this untouched goldmine. The national Community Futures Program (CFP) supports rural businesses and entrepreneurs. Funded by the Regional Development Agencies (RDAs), the CFP enables Canada’s Community Futures Organizations to offer business services, loans, and strategic economic guidance to non-metropolitan SMEs and entrepreneurs. Startups that can contribute to regional development through tourism can benefit from the niche government funding and business services support.

4. Francophone Tourism 

The Francophone tourism market, both domestic and international, represent over 274 million potential travellers to Canada and its regions. Many Francophone travellers reside in the United States, or are a short flight away in European countries like France, Belgium, Switzerland, and Eastern Europe. Canada’s heritage, cultural depth, and tourism allure make it a prime destination for these French-speaking and French-loving visitors.

5. Indigenous Tourism

Indigenous tourism presents a big opportunity for startups in Canada. The rich history and significant contributions of Indigenous Peoples are an intrinsic part of the Canadian narrative. The Indigenous Tourism Association of Canada reveals that a significant portion of visitors, including 35% of Chinese and 63% of French travellers, have expressed interest in these experiences.
The Canadian Experiences Fund has been mandated a budget of $68 million to spotlight products and experiences across 5 categories, one of which is investing in Indigenous histories, tales, arts, and modern values through tourism. Startups that can cater to the growing appetite for genuine, market-ready Indigenous experiences can find success in the Canadian market.

Want to Start a Travel and Tourism Business in Canada?

TBDC is the bridge you’re looking for! We are Canada’s premier startup incubator. Successful companies like Ibentos and Ayottaz have graduated from our programs and scaled through North America and the world. Are you ready to do the same and make your mark? To learn more, click here.