Canada’s tourism industry has not yet recovered after the COVID-19 pandemic, according to one economist, as the sector continues to be weighed down by inflation and geopolitics. 

Claire Fan, an economist at RBC Economics, said in a report Tuesday that Canadian residents are taking more trips than before the pandemic, but there is “still a gap” regarding the number of people visiting Canada. She also noted that improving economic conditions could help to spur a rebound in tourism later in 2024 and into 2025. 

The report said that rising inflation over the past few years has contributed to the industry's poor performance. 

“Overall, the price of spending on tourism in Canada (hotels, restaurants, airfares, etc.) was 19 per cent above pre-pandemic 2019 levels in 2023. And despite a loftier price tag for many activities, tourists are getting less for their travel dollars,” the report said.

In an interview with BNN Bloomberg Wednesday, she said the inflation side of the issue is not unique to Canada and should improve going forward. 

“But part of the story outside of inflation also is, (that) we are very specifically seeing a lag in spending out of East Asia. So that includes China, Japan and South Korea, who actually accounted for a pretty big chunk of foreign demand during the year's pre-COVID-19,” Fan said. 

“So that could be due to a variety of reasons, obviously the geopolitical concerns impacting air travel is probably one of the bigger reasons among why demand is still lacking over there. And potentially it's hard to give a credible forecast as to when that's going to be resolved.” 

The report highlights that travel spending from those nations was “still down by 30 to 50 per cent by the end of 2023 relative to the end of 2019.” However, higher spending from visitors from other nations including India, Mexico and the U.S. worked to offset the decline.