Canadians pull back on U.S. trips, threatening to widen travel deficit

Canadians are skipping trips to the U.S. and visitors from other countries could soon follow threatening to deepen the US’ $50 billion travel deficit.

Experts say they’re pulling back for quite a lot of reasons, starting from an unfavorable currency exchange rate to the U.S. political climate given President Donald Trump’s trade policies and his public statements on annexing Canada, in addition to high-profile detainments of people that already had visas to be within the U.S., long wait visa times and other policies which have added to tensions with longtime close allies.

Reached for comment Friday, a White House spokesperson said by email that “everybody wants to come back to President Trump’s America.”

Canadians “will now not need to endure the inconveniences of international travel when Canada becomes our 51st state” and that “Europeans are wanting to benefit from the Golden Age of America in the event that they so decide to,” the spokesperson said.

In response to President Trump’s tariff plans on the time, former Canadian Prime Minister Justin Trudeau last month urged Canadians to “select Canada” and suggested “changing your summer vacation plans to remain here in Canada and explore the various national and provincial parks, historical sites and tourist destinations our great country has to supply.”

The cross-border travel trends and Trump administration’s policies are worrying some in the US’ travel industry, which pulls in greater than $1 trillion in direct spending a yr.

The U.S. Travel Association said in an announcement to CNBC that there’s a “an issue of America’s welcomeness, a slowing U.S. economy and up to date safety concerns.

“These challenges are real and demand decisive motion,” the organization, whose members include large hotel groups, airlines and other major travel firms, said, adding that’s “actively working with the White House and Congress to advance policies that drive economic expansion and keep the U.S. competitive on the worldwide stage.”

There are billions of dollars on the road. People from the US already travel abroad and spend more in other countries than the U.S. brings in from foreign travelers.

Last yr, the US’ travel deficit was greater than $51 billion, meaning Americans spent that way more abroad than foreigners visiting the U.S. spent, stripping out spending for medical and academic purposes, which still showed a deficit, in line with Commerce Department data.

The U.S. brought in greater than 72 million visitors last yr, still below pre-Covid levels, in line with a report from Jefferies. Visitors from Canada were the most important group, accounting for 28%, followed by Mexico at 23%, the bank said in a note this month.

Travel and tourism of inbound visitors are counted as U.S. exports, they usually accounted for about 8% of U.S. exports of products and services, in line with the Commerce Department.

International visitors from overseas are especially essential because they have an inclination to remain longer and spend extra money than local tourists, in line with the U.S. Travel Association.

In February, Canadians’ return flights to Canada fell 13% over last yr while return trips by automotive dropped 23% in line with Statistics Canada.

Hotel demand in some area along the Canada-U.S. border are also down. As of March 15, they were off 8% in Bellingham, Washington, and three.5% within the Niagara Falls area, in line with hotel data firm STR. Nevertheless, demand throughout Florida, a top destination for Canadian travelers, is up 3% over last yr, the firm said.

Canadian airlines are cutting some routes and flights to the U.S.

Canadian airline Flair, for instance, said it canceled its planned Toronto to Nashville, Tennessee, route.

“Our network decisions are driven solely by consumer demand—we deploy our aircraft where demand is strongest to offer the bottom fares to probably the most travellers,” a spokeswoman for the airline said by email.

Canadian airline WestJet said it has seen Canadian customers shift bookings from the U.S. to other popular sunseeker destinations like Mexico and the Caribbean.

“The airline stays focused on knowing where people wish to go, and we are going to proceed to fly where there’s demand,” a spokeswoman said.

The shift comes as travel executives have warned about weaker-than-expected bookings for domestic U.S. trips, meaning more local tourism may not have the opportunity to make up for the drop in trans-border travel. While U.S. household credit and debit card spending overall was up 1.5% over last yr as of March 22, spending on airlines dropped 7.2%, in line with a Bank of America report this week.

United Airlines CEO Scott Kirby, for instance, said at an investor conference earlier this month that the carrier is trimming routes partly since it’s seeing “loads of it trans-border, big drop in Canadian traffic to enter the U.S.,” in addition to a pointy drop in flights that had previously catered to U.S. government-tied travel.

Lara Harbachian, who works for a digital printing company in Montreal, and eight friends (up to now) had been considering several U.S. destinations this yr to have fun their fortieth birthdays: San Diego; Palm Springs, Calif.; Savannah, Georgia; or Nashville. The winner was farther east: Barcelona, Spain.

While the flights to Europe were dearer than those to the U.S. destinations, Harbachian said it can be cheaper for her and her friends to go to the favored Spanish city, where they will not must rent a automotive and high-end meals and hotels are cheaper, especially with a weaker Canadian dollar over the greenback.

“I can get a 15 euro meal but I am unable to get a $15 meal” within the U.S., she said.

Trump earlier this month created a task force for the 2026 FIFA World Cup that the U.S. is co-hosting with Mexico and Canada to “showcase the Nation’s pride and hospitality while promoting economic growth and tourism through sport.”

Those were prompted by detentions even of people who had visas to be in the US in addition to Trump’s executive order that the country would only recognize two biological sexes, prompting concerns from governments in Europe about travelers whose passports state a unique gender than the one they were born with.

For instance, Germany said that “travelers with the gender entry “X” or whose current gender entry differs from their birth date should contact the responsible U.S. diplomatic mission in Germany before entering the country to search out out in regards to the applicable entry requirements.”

Travel warnings “could deter international visitors, especially first-time travelers,” said Carolin Lusby, assistant professor in tourism on the Chaplin School of Hospitality & Tourism Management at Florida International University.

She said there is commonly a rebound after an incident or tragedy occurs, comparable to after the Paris terror attacks in 2015. “But loads of times is we all know that after a destination image changes, it takes loads of effort to bring back the trust,” she said.

“By way of the economic consequences, that might turn into billions of lost dollars,” she added.