Every day, more than 57,000 international overnight visitors stream into Canada, drawn by our safe, secure cities, friendly people, and remarkable natural parks and wildlife. These visitors are welcomed by hundreds of thousands of Canadians who work in our tourism sector, and who show off the very best our country can offer. From our largest cities to our most remote wilderness, and from world-class resorts and convention centres to the family-run bed-and-breakfast, there are few places in Canada that tourism does not touch.
Since 2000, tourism has been growing approximately three to four times faster than population, and about 1.5 times faster than global GDP – a trend that is expected to continue into the mid-2020s. In fact, in 2017, the travel and tourism sector posted a 4.6% growth rate, exceeding a global GDP growth rate of 3.7%. This meant that the sector outpaced global GDP growth for the seventh successive year, even as the world observed the strongest GDP growth in a decade.
However, there is ample evidence that Canada’s tourism potential remains significantly underdeveloped. Growth in Canadian tourism has lagged global growth for three of the last four years. Tourism also represents a much smaller fraction of Canada’s exports compared to peer countries like the United States, Australia, the United Kingdom and Japan. And as this report describes, Canada is not capturing its “fair share” of the growth in the sector globally. In fact, there is an opportunity for the country to more than double its current number of international arrivals and their associated revenues by 2030.
While Canada can significantly raise its tourism aspirations, the potential of the sector cannot be achieved overnight, nor can it be unlocked through the actions of governments or the private sector acting alone. The challenges are significant, including concentrated demand, limited transportation options, labour shortages, and lack of attractive investments. Addressing these issues will require a new approach to coordinating the efforts of all levels of government, and all sizes of tourism operators.
In short, the world is ready for more Canada. Now it’s time to make Canada ready for the world.
This report is intended to stimulate discussion about the structure, performance and potential of the sector, and introduce possible avenues to grow Canada’s visitor economy.
McKinsey & Company provided fact-based research and analysis to support the development of the findings presented in this report, in collaboration with Destination Canada.