TORONTO — The Canadian Association of Tour Operators (CATO) has released a new Economic Impact Analysis examining the performance of Canadian tour operators during the 2024-2025 period, highlighting continued growth in revenues, employment and overall economic contribution.

The study, conducted by consulting firm BDO, marks the third economic impact assessment commissioned by CATO since 2021, when the association first sought to measure the effects of the COVID-19 pandemic on the sector and track its recovery.

According to the report, CATO members’ direct economic impact increased from $5.3 billion in 2023 to $6.1 billion in 2025, representing growth of 8.7% over two years. Total economic output, including indirect impacts, rose from approximately $9.2 billion to $9.9 billion during the same period.

“Despite all the challenges and headwinds over the last 12-14 months, those are not only significant increases but they’re truly impressive,” said Brett Walker, Chair of the CATO board of directors. “The direct economic impact data from USTOA for 2024 is around $24 billion. Our economic impact represents 25% of USTOA’s, while our population is only 10% the size of the US.”

Employment growth was another key finding. Total employment among CATO members increased from 21,824 in 2023 to 25,869 in 2024 and reached 29,104 in 2025. Full-time employment rose from 20,294 in 2023 to 25,071 in 2025, while direct full-time employment grew from 3,702 to 6,953 during the same period.

Labour income also increased. Direct labour income rose from $222.9 million in 2023 to $276 million in 2025, while total direct and indirect labour income increased from $1.327 billion to $1.542 billion.

SHIFTING TRAVEL PATTERNS

The report found that travel demand to the United States remained below pre-pandemic levels for many tour operators, with respondents reporting declines in revenues associated with Canada-U.S. travel and anticipating further softness over the next 12 months.

At the same time, operators reported growth in tour package sales for non-U.S. destinations over the past year, particularly in Europe, as well as Mexico, the Caribbean and Latin America. Increased interest in domestic travel, especially within Atlantic Canada, was also noted.

According to the survey, many operators have responded by expanding international programming and adjusting product offerings to reflect changing consumer demand.

AI AND SUSTAINABILITY

The report found that artificial intelligence adoption remains in its early stages among tour operators. Those using AI primarily view it as a tool to improve operational efficiency and enhance customer experience rather than fundamentally change business models.

Respondents also cited uncertainty around best practices, regulatory requirements and the long-term implications of AI. No organizations reported concerns about job displacement resulting from AI adoption.

On sustainability, the report found widespread recognition of its importance, although implementation varies across organizations.

Initiatives cited by members include reducing single-use plastics, promoting reusable water bottles, establishing carbon reduction targets, supporting local communities and partnering with eco-certified suppliers and accommodations. Several operators also reported pursuing formal sustainability frameworks, including B Corp certification and alignment with the United Nations Sustainable Development Goals.

LOOKING AHEAD

In releasing the report, Jean Hébert, CATO executive director, pointed to the sector’s continued recovery and evolution.

“This year’s Economic Impact Analysis demonstrates the remarkable resilience and adaptability of Canada’s tour operator sector. Despite economic uncertainty, shifting travel patterns, geopolitical challenges and evolving consumer expectations, our members continue to grow, create jobs, invest in innovation and contribute significantly to the Canadian economy. 

“As we look ahead, CATO remains committed to advocating for policies that support growth, competitiveness, and consumer confidence, while helping our members navigate an increasingly complex global tourism landscape. The strength of these results is a testament to the entrepreneurial spirit of our members and the vital role they play in Canada’s travel and tourism economy.”