Canadians still plan to travel despite rising energy costs: study

A new survey suggests Canadians still plan to travel this year despite rising transportation costs and economic uncertainty, with most choosing domestic destinations as a way to save money — a trend that could still provide a major boost to the economy.

The findings were included in the Business Development Bank of Canada’s annual tourism outlook released Wednesday (May 13), which reported that 90 per cent of Canadians intend to take a trip in 2026.

Among those planning to travel, 92 per cent expect to take at least one trip within Canada, while 70 per cent are considering international travel.

Only 30 per cent said they plan to visit the United States, as many Canadians continue to avoid travelling there.

Political & social considerations

Political and social considerations continue to influence destination choices, the study says, pushing travellers domestically, or toward other international destinations.

Close to 70 per cent of travellers said they were boycotting the U.S. as a travel destination because of political or ethical reasons.

According to the BDC, the increase in domestic tourism could have significant economic benefits.

The agency estimates that if every Canadian traveller replaced just one overnight international stay with a trip inside Canada, it could add as much as $4.6 billion to the country’s GDP.

Geopolitical uncertainty and tensions with the United States have “weighed modestly” on international travel, the survey says.

The number of foreign visitors to Canada edged down 0.6 per cent in 2025, reflecting fewer arrivals from the U.S., which were only partly offset by more visitors from other countries.

At the same time, fewer Canadians travelled abroad. The number of Canadians returning from international trips in 2025 fell nearly 17 per cent compared with 2024, driven by a sharp 25 per cent decline in U.S.-bound travel.

The number of Canadians travelling to the U.S. also reached the lowest level ever seen outside pandemic years.

While trips to other international destinations increased, they were not enough to offset the drop in travel to the United States.

Instead, many Canadians chose to travel at home. Over the first three quarters of 2025, Canadians took 3.6 per cent more domestic trips than a year earlier, including a notable increase in overnight stays.

Travel budgets

The survey was conducted before the recent surge in energy prices.

However, tourism momentum is expected to remain positive in 2026, despite some pressure on household budgets.

The survey found Canadian households expect to spend roughly $7,000 on travel this year, with at least one-third of that spending staying within Canada.

Travel still holds an important place in Canadians’ lives, with 58 per cent of respondents describing it as a central or important part of their lifestyle.

As a result, many travellers prefer to make compromises rather than give up travel altogether, the survey suggests.

More than eight in 10 households (81 per cent) report making compromises to afford travel, such as choosing more affordable accommodations, travelling during off-peak periods or being flexible with travel dates.

Travelling within Canada also stretches travel dollars further. In 2025, Canadians spent about $43 less per night when travelling domestically than when travelling abroad.

As Canadians plan to spend an average of 12 days abroad in 2026, “these savings add up,” says BDC.

Although concerns about affordability and tensions with the U.S. influenced more than a quarter of travellers to remain in Canada, the most common reason — cited by 45 per cent — was a desire to explore the country’s diverse regions.

Another 40 per cent said they planned domestic trips to visit friends and family, while 39 per cent wanted to support Canadian businesses and the national economy.

On average, Canadians expect to spend about thirteen days travelling within Canada in 2026.

Travel remains important to many Canadians, with 58 per cent describing it as a key part of their lives.

However, 81 per cent said they are adjusting their plans to reduce costs, including booking cheaper accommodations and travelling during off-peak periods.

The report also noted Canadians spent an average of $43 less per night on domestic trips compared with international travel last year.

Cautious outlook

Despite the positive survey results, uncertain economic conditions point to a “cautious but positive environment” for tourism in 2026, the survey says.

Global growth is expected to slow, with Canada’s GDP forecast to increase by a mere 1.0 per cent, down from 1.7 per cent in 2025.

Elevated uncertainty – driven by ongoing trade tensions and heightened geopolitical risks – is “weighing on the outlook,” says BDC.

Canada, notably, will be co hosting the FIFA World Cup in 2026. Matches are scheduled in Toronto and Vancouver.

“The event is expected to draw a significant number of international visitors and generate spillover benefits for nearby destinations,” the survey says.

Estimates suggest that the tournament and related activities could generate up to $3.8 billion for Canada between June 2023 and August 2026.

The survey gathered responses from 1,000 Canadian adults online between Feb. 25 and March 3, spanning the period before and after the U.S. and Israel launched the war with Iran, which drove energy prices sharply higher.

Don't miss a single travel story: subscribe to PAX today!  Click here to follow PAX on Facebook.