In the age of AI, why Canadian travel agencies just saw revenues rise

While artificial intelligence and the internet are making it easier to find and compare travel options and book them with the click of a button, many Canadians are still turning to the old-fashioned way of planning a vacation – going to a travel agent.

The operating revenue of the travel arrangement and reservation services industry rose 8.8 per cent to $18.3 billion in 2025, Statistics Canada said in a report on Monday. This follows an even bigger increase of 9.3 per cent in 2024.

The 2025 increased happened despite Canadian travel to and from the U.S. falling 25.4 per cent compared to 2024.

This comes at a time when AI chatbots can compare flights and hotels for users and point them to websites. Meta’s newly launched agentic AI Muse is even able to book flights across hundreds of airlines.

The information overflow that comes with AI and internet searches does not necessarily translate to greater clarity, said Suzanne Acton-Gervais, president of the Association of Canadian Travel Agencies and Travel Advisors.

“A search engine can offer a thousand answers. A great travel agency and travel advisor knows which questions to ask first. That is the value of human judgment,” she said.

When planning a vacation, many Canadians value a human connection, she added.

“Ultimately, our business is not simply travel. Our business is people. It is human connection, human judgment and human care,” Acton-Gervais said.

Booking airline seats is still a big focus, accounting for 35 per cent of travel agencies’ operating revenue. However, packaged tours are not far behind, accounting for a quarter (25.2 per cent) of the revenue.

“It reflects a broader desire for travel that is curated, seamless and designed around the individual,” Acton-Gervais said.

While customers of travel agencies tend to skew older, younger customers are a “growing opportunity,” she added.

“What’s particularly interesting is that these are highly digitally fluent consumers. They may discover a destination through social media, use AI to research it and compare options online, and still turn to a professional agency and advisor for expertise, personalization and support,” Acton-Gervais said.

“They are not choosing between technology and human advice, they are using both.”

However, the Canadian travel industry is facing significant headwinds from declining U.S. travel.

Since U.S. President Donald Trump launched a trade war against Canada in 2025, Canadians have been avoiding travel south of the border.

This presents a problem for travel agencies in Canada, since 60 per cent of their operating revenue came from U.S. travel, Statistics Canada said.

The industry’s growth could be further constrained in 2026, the report warned, but added that non-U.S. travel could present an opportunity.

From January to June 2026, Canadian-resident return trips from the United States fell 4.6 per cent compared to the same period one year earlier, while return trips from other countries rose 4.8 per cent, Statistics Canada said.