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Lack of capital restrains Indigenous tourism growth in Canada

This fast-growing segment of the industry has surpassed pre-pandemic activity levels
Greg Hopf’s Moccasin Trails Inc. in Kamloops is one of the 400 or so Indigenous tourism businesses that are based in B.C. | Submitted

Greg Hopf’s day usually starts with a group hike and visit to various plants that Indigenous Peoples use to heal, or a canoe trip on the river with an Indigenous elder sharing their childhood memories and singing traditional songs.

Hopf’s Moccasin Trails Inc. in Kamloops is one of 400 or so Indigenous tourism businesses in B.C. His company is on the itinerary of multi-day group tours from all over the world that offer travellers the chance to experience Indigenous cultures in Canada.

“Since we returned from the pandemic, demand has surprisingly been even a little bit more as before,” said Hopf, who started his tour business in 2016.

Indigenous tourism has been one of the fastest-growing segments of Canada’s tourism industry. It saw annual growth of 23 per cent between 2015 and 2018, far outpacing the average growth of the tourism industry during that time. It also contributed $1.9 billion in revenue in 2019, according to the Vancouver-based Indigenous Tourism Association of Canada (ITAC).

The industry is also rebounding fast post-pandemic. In 2023, the association estimated close to $1.3 billion in revenue was generated from the domestic market alone. Indigenous tourism was also listed as a top priority in the Federal Tourism Growth Strategy released last summer.

“It hit Canada very hard when we heard about the discovery of [residential school] burial sites and all these things that came out in the media a few years ago. I think it really woke up the consciousness of Canadians that they want to support reconciliation,” said Keith Henry, president and CEO of ITAC.

“People want to learn more about their own history, the diversity of the Indigenous communities, and they want to understand the stories.”

Around 25 per cent to 30 per cent of national industry revenue came from Indigenous tourism businesses in B.C., according to Henry.

“There’s a lot of really great diversity of [Indigenous tourism] experiences in British Columbia. It’s definitely been one of the leaders in the country for a lot of years.”

Lack of access to capital restrains growth

The supply of products and infrastructure is struggling to keep up with high demand for Indigenous tourism experiences – restraining the sector from realizing its full potential, according to Henry.

“We were about three to four per cent of the entire [tourism] industry, but consumer demand is much higher than that.… Demand exceeds, whether it’s domestic or international, 50 per cent in any market,” he said, adding that most Indigenous communities in Canada see Indigenous tourism as a tremendous opportunity.

“We don’t have enough of the businesses to give people those experiences, [although] we’re in a unique opportunity right now to really have potential to grow.”

He said lack of access to capital is one the biggest challenges as it takes investment to build major infrastructure developments, such as accommodation, food services and transportation access, that are crucial to support Indigenous tourism businesses and attract visitors, especially in rural communities.

“Most of the nations just don’t have the ability to invest $30 to $40 million in these things so that’s what’s limiting. We need to continue to attract investment.… We need more of an investment strategy specifically for indigenous tourism if we want to see it grow to the region’s potential,” said Henry.

Compared to others, Indigenous communities in Canada face more obstacles to access capital including historical and geographical reasons and lack of financial literacy in some places, according to Lawrence Schembri, senior fellow of Fraser Institute and author of The Next Generation: Innovating to Improve Indigenous Access to Finance in Canada.

“There’s this very large physical capital deficit that exists in indigenous communities. They simply don’t have the public infrastructure, economic infrastructure and a lot of other fiscal capital necessary to free economic development,” said Schembri.

Labour shortage is another challenge in the industry. Like other sectors in tourism, employers need to attract back workers that left the sector during the pandemic, and more than half of the positions are for people from Indigenous communities.

The sector expects to create 21,800 new jobs across Canada, including 3,900 in B.C. and there is need for about 150 new businesses in the province to fulfill the high domestic and international interest,” according to Henry.

Ensuring authentic experiences

For Hopf and many others in Indigenous tourism, the work offers a sense of pride and an opportunity to educate others.

“I honestly think that Indigenous people are the most stereotyped people in our country and that’s because Canadians and the world don’t know who we are,” he said.

“There’s a lot of people out there that still think we’re that Disney Indian, where we’ve got feathers on our head, and we chant and holler and dance around in circles around the fire. So for me, it’s education. I want to make sure that the world is educated on the diversity of us.”

There is a wide variety of Indigenous tourism businesses and products in the market, including tours, restaurants, wineries, art galleries, hotels and others, but experts say only those that are majorly owned by people from the Indigenous community are authentic.

“The most important thing is that you make sure that if you’re spending money at a tourism experience store or hotel or restaurant, that it is Indigenous owned,” said Jennifer Kramer, associate professor of museum and sociocultural anthropology at the University of British Columbia.

“Because we don’t want those tourism dollars going to those people that are pretending to be selling indigenous culture when they aren’t.… It’s so important that indigenous people are representing themselves, their own cultures, their own ways of knowing and being in relationship to this land.”

Businesses need to be at least 51 per cent owned and operated by people from Indigenous communities to be verified by ITAC’s The Original Original Accreditation Program.

Hopf said he is excited with the growth of the industry and his competitors are not from across the street, but in Disneyland and other places where businesses capitalize on manufactured Indigenous culture and characters.

“I see the day where [more] visitors and guests are booking indigenous experiences as a destination, not as an add-on to their trip,” he said.

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