Ontario’s Tourism Industry Struggles With Rising Costs And Declining Visitors

Published on December 10, 2025

Ontario’s tourism industry has faced significant challenges in 2025, as high operational costs, a lack of visitor influx, and insufficient training opportunities hurt its ability to recover and grow. The Tourism Industry Association of Ontario (TIAO) recently held its annual summit in downtown Toronto, bringing together provincial representatives and industry leaders to discuss the state of the tourism sector and chart a path forward. Unfortunately, the findings revealed that while Ontario’s tourism sector remains an essential part of its economy, several critical issues must be addressed to ensure its continued prosperity.

Increased Costs and Limited Visitor Numbers

One of the most concerning trends in Ontario’s tourism sector has been the substantial increase in operational costs across the board. According to TIAO data, 85% of tourism-related businesses in Ontario reported a rise in costs in 2025 compared to 2024. This trend is largely attributed to rising prices for goods and services, compounded by ongoing trade disputes between Canada and the United States. As a result, many businesses have turned to local suppliers to mitigate costs, providing some relief but not enough to completely offset the challenges posed by the economic landscape.

Despite these challenges, Ontario’s tourism industry has increasingly turned to its domestic market, especially Ontarians themselves, who remain the largest group of visitors. However, the province’s market share of domestic tourism has been insufficient to offset the losses from the international market. U.S. visitor numbers were down significantly, and Canadians are choosing alternative destinations within the country, further tightening the local market.

Decline in International Tourism and Educational Setbacks

Ontario’s reliance on US visitors has proven problematic, as ongoing tariff disputes have affected cross-border travel. In addition, international tourism has struggled, particularly following a significant reduction in international student enrollments. Many post-secondary programs that focused on tourism-related studies have been suspended due to a lack of funding and lower international student numbers. This drop in tourism-specific educational programs, coupled with fewer opportunities for domestic training in the tourism sector, has left businesses without a skilled workforce to manage the rising challenges.

Regional Disparities in Tourism Performance

The impact of these challenges has not been uniform across Ontario. While larger metropolitan areas like Toronto and Niagara have faced significant drops in visitor numbers, some of Ontario’s more rural areas have remained resilient. The Bruce Peninsula and Kawartha Highlands National Parks, for example, have experienced steady seasonal tourist traffic, particularly from returning visitors. These areas have proven more resilient to the downturn in international and domestic tourism, as tourists seek more affordable and tranquil alternatives to the busy urban centres.

A Strategic Playbook for Recovery

In response to these ongoing struggles, TIAO released its Forward Motion Strategic Playbook earlier this year, outlining a roadmap for Ontario’s tourism sector from 2025 to 2030. The playbook highlights the urgent need for increased investment in tourism infrastructure and education. TIAO officials are pushing for the introduction of capital investment incentives and tax breaks for businesses in the tourism sector to improve resilience and productivity. However, these initiatives depend on broader government support and investment in the sector’s long-term growth.

Moving Forward: The Need for Government Action

Looking ahead, Ontario’s tourism industry faces a difficult path, but not one without potential solutions. While external factors such as global economic tensions and political volatility may be beyond the province’s control, there are still actionable steps that can be taken. Through targeted investments and improved training opportunities, Ontario’s tourism sector can strengthen its infrastructure, better engage with domestic and international markets, and emerge more resilient in the face of future challenges.

In particular, TIAO advocates for greater support for small businesses within the tourism sector, urging the government to recognise the importance of tourism not only as a key economic driver but also as a means of promoting regional development. By strengthening the entire tourism ecosystem, Ontario can reduce the risks that individual businesses face and ensure a more stable and sustainable industry moving forward.