High costs, low visitors and no training hurt Ontario’s tourism sector in 2025

Ontario’s tourism industry has been outmaneuvering potential setbacks for years, and 2025 has been no different.

Yesterday, the Tourism Industry Association of Ontario (TIAO) held what has been steadily turning into an annual event: a summit at Queen’s Park in downtown Toronto, where MPPs and industry leaders look back on the calendar year.

Representatives within TIAO took to the podium to discuss how crucial tourism is to the economic engine of Ontario, and more importantly, which areas within that engine are leaking and rattling.

Weak points included ongoing complexities of tariff disputes between the U.S. and Canada, but also the ways other provinces have been fortifying their infrastructure, resulting in tourism-based powerplays targeting the money spent in the great white north.

TIAO officials indicated, in turn, that since U.S. visitorship was critically low this year and Canadians were opting for additional travel options coast to coast, Ontario’s tourism market was strong-armed into tapping into its home turf for the bulk of 2025.

“Our biggest market, and by extension, our biggest spenders by total volume, is Ontarians,” Andrew Siegwart,  TIAO President and CEO, told INsauga.com. “We are a very large province, populous, and we love to travel close to home.”

Siegwart, however, was not shy to note that despite Ontario’s generous sample size (a third of the country), that doesn’t mean it compares to the much larger markets of, say, Europe or the U.S.

To better monitor domestic and foreign cash flow, TIAO released the Forward Motion Strategic Playbook for Ontario’s Tourism Industry earlier this year, a sprawling document referenced at this year’s summit in Queen’s Park, which laid out a roadmap to help Ontario’s tourism sector from 2025 to 2030.

A document that, in concert with recent studies, has shown key areas requiring immediate attention.

“We were assessing how summer 2025 performed when compared to summer 2024, and about 85 per cent of all respondents and businesses tied to the tourism economy have indicated that their costs have increased in all key categories of operations,” says Siegwart.

This metric is connected to the costs of goods and services in Canada, which have taken a substantial hit due to the ongoing trade war with the U.S.  The silver lining, however, according to Siegwart, is that out of that majority struggling to get by, 50 per cent have utilized local suppliers to get goods at a manageable price point.

In turn, this approach gives tourist attractions, restaurants and hotels within their proximity a semblance of a chance.

While there have been, according to Siegwart, conversations with the province about incentives to help bolster the tourism industry, through investment and tax breaks, a key area that has severely wounded the industry in unforeseen ways is the loss of more than 50 post-secondary programs built around tourism.

“They’ve been more or less suspended based on the current situation within those colleges, where these programs have been terminated based on the drop in enrollment of international students, alongside several other barriers to funding at the college level, which prevent further domestic enrollments,” says Siegwart.

Multiple sources have reported that, as of this past November, Canada approved 80,000 permits for international students — a 62 per cent drop from 2024. Concerning the institutions themselves, calls for further funding made a splash earlier this year, with the urgency behind enrollment highlighted amidst ongoing political and economic hostilities with the U.S., and the flow of the student body across borders.

Siegwart wanted to highlight, however, that not all tourist sectors in Ontario are created (or suffering) equally amidst ongoing pitfalls in the system.

The Niagara Region, based on data collected by TIAO, is seeing some of the hardest hits, as tourists from the U.S. who once made regular trips across the Rainbow Bridge are dwindling rapidly. Toronto has also seen a drop-off in popularity, as the domestic market within Canada has viewed the big city as less of a viable place to go spend what limited vacation time and dollars they have available due to costs.

While in the more northern stretches of the province, such as the Bruce Peninsula and Kawartha Highlands National Parks, a steady stream of seasonal tourists, often returning families, has kept that arm of the tourism economy stronger than most other Ontario locations.

Concerning the road ahead, especially with the U.S., Siegwart and officials within the TIAO have not been sitting on their hands, and have surveyed would-be tourists down south, who have indicated that they have “felt a little sheepish when coming to Canada.”

As a result, an advertising blitz encouraging those in the U.S. that their money is still green up here in Canada (if not greener) has been making its rounds, leaving Siegwart curious to see its effects into 2026.

At the same time, concerning international markets, Siegwart also indicated that many are looking for an alternative to the U.S., especially amid the Trump administration’s cavalier attitude towards the treatment of out-of-country visitors.

“They’re looking for an alternative to the U.S., especially in North America, and Canada can be that, but that relies on a whole other level of engagement on our end of the business,” says Siegwart.

Looking ahead to the new year, while Ontario’s tourism industry can’t force the invisible hand of the market or the whims of politicians into new positions, several controllable variables can be addressed.

“So the idea is, through capital investment or tax credits for private businesses, we can start investing in things that can make them more resilient and productive,” says Siegwart.

However, such a thing won’t be possible unless there is more general support for Ontario’s tourism branch, with Seigwart stating, “The more players there are on the field and the bigger the ecosystem, the less risk there is for everyone.”

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