Tourism gross domestic product rose 1.3% in the second quarter, outpacing many parts of the economy even as overall real GDP by industry slipped 0.2%. Tourism’s share of nominal GDP edged up to 1.77% from 1.75% in the prior quarter, underscoring a sector that is doing more of the heavy lifting for growth.
Real tourism spending in Canada totaled $26.5 billion, up 0.9% from the first quarter’s slight decline.
The rebound was driven by Canadians choosing to travel and spend within the country, a pattern that shows up clearly in the national accounts.
Domestic travel offset weakness from abroad
The strongest engine was domestic demand, which climbed 2.9% from the first quarter. Spending on accommodation services rose 6.5% and outlays on food and beverage services increased 3.9%.
Transportation demand picked up 1.5% for residents and 0.7% overall, helped by a reversal in the transportation industry’s earlier softness. Travel services and vehicle rentals were the only categories to retreat.
Tourism exports fell 5.3% in the quarter as Canada welcomed fewer overnight travelers, including a 10.2% drop from the United States.
All major product groups tied to nonresidents declined, led by non-tourism products minus 8.7%, accommodation minus 5.1%, and food and beverage services minus 6.5%.
The result was a smaller nonresident share of total spending compared with recent quarters.
Accommodation GDP advanced 2.4% and food and beverage services added 1.0%. Transportation GDP grew 0.9%, reversing a decline in the first quarter.
Non-tourism industries that benefit from visitor activity also strengthened, rising 0.7% after a softer start to the year. For operators, the pattern points to another quarter in which average daily rates and restaurant volumes likely did more work than cross-border foot traffic.
For early Q3 context, see our coverage on [Canada’s GDP rose 0.2% in July as goods producers rebounded] and [Canada restaurant sales extend gains in July; prices up 3.2%], which align with the lodging and dining strength that carried Q2.
Jobs attributable to tourism increased 0.6% to 712,100 positions, outpacing the 0.2% gain in economy-wide employment.
Tourism’s job share ticked up to 3.34% from 3.32%, with the biggest contributions from food and beverage services and recreation and entertainment.
Employment in accommodation was flat, a reminder that staffing in hotels can lag revenue when operators lean on productivity and scheduling to meet demand.
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Leading indicators cited in the release show year-over-year growth in arrivals by air through July and August, while land entries fell.
That pattern suggests inbound travel could firm along flight corridors even if road traffic remains patchy.
Domestic momentum, however, is still doing the heavy lifting as Canadians report plans to spend more on vacations in Canada and pull back on trips to the United States.
Sources: National tourism indicators, second quarter 2025 (Statistics Canada, PDF)
