Market Readiness Index

Canadian consumer confidence drops, US traveller demand remains strong but uncertainties arise, and some international markets lag.

After steady improvement over the summer, Canadian and Ontarian consumer confidence has sharply declined, with more Canadians expressing uncertainty about their finances and the job market. However, despite this growing pessimism, both intra-provincial and broader domestic travel demand have remained stable, growing over 4% year-over-year in 2024. Trade tensions with the US and rising economic uncertainties can put further downward pressure on Canadian travel sentiment. Increasing support for domestic products could strengthen domestic travel demand in Toronto.

Despite some uncertainties due to the US elections, demand from the US market in Toronto remained robust in Q4 growing 15% year-over-year, driven by a strong US dollar, with particularly high demand in November. Overall, visitation grew more than 9% in 2024 compared to 2023. The outlook for the US traveller market remains generally stable, but geopolitical and trade tensions can influence travel sentiment between the two countries.

Overseas markets demonstrate strong year-over-year momentum, except for Mexico, with overall growth of 14% in 2024. The UK and Germany continue their steady upward trajectories, growing 6.7% and 7% year-over-year, respectively, but remain more than 10% below pre-pandemic levels. Visa requirements for Mexicans continue to impact visitation demand—a trend also reflected in accommodation and activity searches, which are down 36% and 57%, respectively.

Geopolitical tensions with China have shown little improvement, adding uncertainty to outbound travel recovery from the region. Additionally, the persistently weak yen continues to place additional financial burden on Japanese travellers, making outbound travel more expensive. Despite strong momentum year-over-year in 2024 – China (+55%) and Japan (+27%) – both markets face persistent hurdles in returning to pre-pandemic travel levels.

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Destination Toronto’s Market Readiness Index is a quarterly summary of market signals and indicators using the latest available data, assessing the readiness of visitor source markets for Toronto’s visitor economy. The index enables informed decisions about the timing and approach of sales and marketing activity to attract visitors to the destination.