CATO report highlights tour operator growth, U.S. travel shift

The Canadian Association of Tour Operators has released its latest Economic Impact Analysis report, showing continued growth among Canadian tour operators and a shift in demand away from U.S.-focused travel.

The 2024-2025 report, prepared by BDO, is CATO's third study of the economic impact of Canadian tour operators. 

The survey focused on revenue and expenditures, employment and innovation. Results do not include ATOQ members.

According to CATO, the direct economic impact of its members rose from $5.3 billion in 2023 to $6.1 billion in 2025. 

Total economic output, including indirect impact, increased from nearly $9.2 billion to $9.9 billion over the same period, an increase of 7.4 per cent.

"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 per cent of USTOA's, while our population is only 10 per cent the size of the US."

The report also shows employment growth across the sector. Total employment rose from 21,824 in 2023 to 25,869 in 2024 and 29,104 in 2025. 

Full-time employment increased by 19 per cent from 2023 to 2025.

CATO said revenues tied to Canada-to-U.S. cross-border travel declined substantially in 2025, with further declines expected over the next 12 months. 

The report suggests Canada-to-U.S. travel demand is expected to remain well below pre-pandemic levels for many tour operators.

At the same time, most respondents reported growth in tour package sales for non-U.S. destinations over the past year, reflecting outbound international travel demand and product shifts in response to reduced cross-border business.

Operators reported expanding international programs, particularly in Europe, which was identified as a core market. 

Growth was also noted in Mexico, the Caribbean and Latin America, while domestic Canadian travel, particularly in Atlantic Canada, was also cited as part of the shift.

The report also notes that AI adoption among tour operators is still in the early stages. 

Where AI is being used, operators are mainly applying it to improve operational efficiency and customer experience rather than to change business models.

Sustainability was identified as an important issue among CATO members, though implementation varies across organizations. 

"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," said Jean Hébert, executive director of CATO.

"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," 

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