Canadians threaten to pull back US travel and widen travel deficits

Canadians are skipping trips to the US, and visitors from other countries could soon threaten to deepen the US $50 billion travel deficit.

Experts say they are pulling back for a variety of reasons, ranging from adverse currency exchange rates to the political situation in the US, given President Donald Trump’s trade policy and his official statement on Canada’s annexation.

A White House spokesperson emailed Friday to comment, “Everyone wants to come to President Trump’s America.”

Canadians “we will no longer have to endure the inconveniences of international travel when Canada becomes our 51st nation, and “if Europeans choose, we want to enjoy America’s golden age,” the spokesman said.

In response to then-President Trump’s tariff plans, former Canadian Prime Minister Justin Trudeau urged Canadians to “choose Canada” last month, suggesting “change their summer vacation plans to stay in Canada and explore many national parks, historic sites and tourist attractions.

Cross-border travel trends and Trump administration policies worry some of the US travel industry, drawing more than a trillion dollars in direct spending per year.

In a statement to CNBC, the American Travel Association said there are issues with “weekends in the US, slowing the US economy and recent safety concerns.

“These challenges are realistic and crucial actions,” the organization, which includes members with large hotel groups, airlines and other major travel companies, added that “we will work actively with the White House and Congress to drive economic expansion and keep the US competitive on the global stage.”

There’s a multi-billion dollar line. Americans are already travelling abroad and spending more in other countries than the US brings from foreign travelers.

Last year, the US travel deficit exceeded $51 billion. That is, Americans spent far more abroad than foreigners who visited the US, stripping them of their spending for medical and educational purposes, but this still showed a deficit.

According to a Jefferies report, the US introduced more than 72 million visitors last year, but is still below pre-Covid levels. Visitors from Canada are the largest group, accounting for 28%, followed by 23% Mexico, which he said in a memo this month.

According to the Commerce Department, travel and tourism for inbound visitors counts as US exports, accounting for around 8% of US goods and services exports.

International visitors from overseas are particularly important, according to the American Travel Association.

Both air travel and land intersections between the US and Canada are down.

In February, Canadians’ return flights to Canada fell 13% last year, but according to Statistics Canada, return trips by car fell 23%.

Demand for hotels in some areas along the Canadian-US border is also declining. As of March 15, it was 8% off in Bellingham, Washington and 3.5% off in the Niagara Falls area, according to hotel data company Str. But demand across Florida, the largest destination for Canadian travelers, is up 3% from last year, the company said.

Canada Airlines has cut several routes and flights to the US

For example, the talent of the Canadian airline said it had cancelled the planned Toronto route to Nashville, Tennessee.

“Our network decisions are driven solely by consumer demand. We will deploy aircraft to the strongest locations to provide the lowest fares to the most travelers,” an airline spokesperson said in an email.

Canadian airline WestJet said it saw Canadian customers shift bookings from the US to other popular Sunseeker destinations like Mexico and the Caribbean.

“Airlines are focused on knowing where people want to go and we continue to fly to places where there is demand,” the spokesperson said.

The transition means more local tourism may not be able to compensate for the decline in cross-border travel, as travel executives warn about bookings for domestic US travel. According to a Bank of America report this week, US household credit and debit card spending has increased by 1.5% as of March 22 last year, while airline spending has dropped by 7.2%.

United Airlines For example, CEO Scott Kirby said at an investor meeting earlier this month that he not only saw “a big drop in traffic across the border to enter the US,” but also saw a sharp drop in flights that previously accommodated US government-bound travel.

Lala Halvatian, who works at a Montreal digital printing company, and eight friends (so far), were considering several US destinations this year to celebrate her 40th birthday. San Diego. Palm Springs, California. Savannah, Georgia. Or Nashville. The winner was even further east: Barcelona, ​​Spain.

Flights to Europe were more expensive than flights to US destinations, but Herbatian said it was cheaper for her and her friends to visit popular Spanish cities.

“I can get a meal of 15 euros, but I can’t get a meal of 15 dollars,” she said.

Earlier this month, Trump created the task force for the 2026 FIFA World Cup. This is a US co-sponsored with Mexico and Canada to “introduce national pride and hospitality while promoting economic growth and tourism through sports.”

Another challenge for the US travel industry this year is the growing number of travel warnings regarding US visits. So far, Germany, the UK, France, Denmark and Finland have issued travel warnings to citizens planning to go to the US.

These were urged by the detention of individuals with visas in the United States, and even Trump’s executive order that the country would recognize only two biological sexes, prompted concerns from European governments and travelers who stated a gender that was different from the one that had their passports born.

For example, Germany said, “If a traveler with a gender entry “X” or a current gender entry is different from his date of birth, he should contact Germany’s responsible US diplomatic mission before entering the country to investigate applicable entry requirements.”

“We’ve seen a lot of people living in hospitality and tourism,” said Carolyn Rusby, professor of tourism at Chaplin School of Hospitality and Tourism Management at Florida International University.

She said there is often a rebound after incidents and tragedy, like after the 2015 Paris attacks. “But I know that when the image of a destination changes, it takes a lot of effort to regain trust,” she said.

“In terms of economic impact, that could turn into billions of dollars,” she added.