Canada Tourism Spending Forecast to Hit C$140.9 Billion by 2026 Amid Hotel Supply Crisis

Tourism Revenue Surges Despite Infrastructure Bottlenecks

Canada is entering one of its most aggressive growth phases in tourism history. Destination Canada has revised its 2026 spending forecast upward to C$140.9 billion, a 6% increase over 2025, surpassing the previous projection of 5.4%.

This momentum is fueled by a combination of record-breaking summer numbers in 2025, a rise in domestic "reshored" travel, and the global spotlight provided by the FIFA World Cup 2026. Long-term projections are even more ambitious, with revenue expected to hit C$216.3 billion by 2035—a 67% jump from 2024 levels.

However, a systemic failure in accommodation development is emerging. While investment capital is available, Hotels Canada warns that punitive taxes, development charges, and bureaucratic approval delays are driving investors toward U.S. markets.

Urban Hubs Driving the Economic Engine

The growth is concentrated in major gateways, though each faces unique pressures:

• Toronto: As the primary international urban gateway, Toronto is leveraging events like Rendez-vous Canada (May 26–29), which hosted 500+ buyers from 24 markets and is expected to generate over C$100 million in sales.
• Vancouver: The city is the clearest example of the supply crisis. With 2024 visitors hitting 11.2 million, demand is now threatening to exceed room capacity as early as 2026.
• Montreal: Serving as the cultural anchor, Montreal is pivotal for diversifying overseas markets. International visitor growth is expected to average 9.8% annually through 2035, nearly double the growth rate of the U.S. market.
• Calgary: Expanding beyond the traditional "big three," Calgary is positioning itself as a global hub and will host Rendez-vous Canada in 2027 to drive interest in Alberta’s tourism corridors.

The Vancouver Warning: A Blueprint for Supply Failure

Vancouver's hotel metrics reveal a market pushed to its limit. In 2025, downtown occupancy reached 80.5%, with an average daily rate of C$342 and revenue per available room (RevPAR) at C$275.

To sustain this trajectory, analysts estimate Vancouver needs approximately 20,000 additional hotel rooms by 2050. The current gap between visitor arrivals and bed availability serves as a warning for other Canadian cities facing similar investment barriers.

National Tourism Data Summary

Toronto Strategic Impact

Vancouver Market Performance

Key Takeaways

• Spending Surge: Tourism spending is accelerating toward C$140.9 billion by 2026, driven by international arrivals and domestic travel.
• Infrastructure Gap: High construction costs and regulatory hurdles are deterring hotel investment, potentially capping growth.
• International Shift: Overseas markets are growing at 9.8% annually, outpacing U.S. visitor growth.
• Employment Engine: The sector remains a cornerstone of the economy, supporting roughly 10% of all Canadian jobs.

FAQ

Why is Canada struggling to build more hotels despite high demand? Investment is hindered by high construction costs, development charges, and lengthy government approval processes, making U.S. projects more attractive to investors.

Which cities are seeing the most international growth? Toronto, Vancouver, and Montreal remain the primary hubs, though Calgary is increasing its international profile.

What is the long-term outlook for Canadian tourism revenue? By 2035, revenue is projected to reach C$216.3 billion, a 67% increase compared to 2024 levels.

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