Canadians are skipping US vacations: A sharp drop in visitor numbers

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In 2025, the US tourism industry faced a significant decline in arrivals from one of its most important source markets: Canada. Canadian visits to the United States fell by around 40%, marking one of the steepest downturns in recent years. Given Canada’s long-standing role as a leading provider of international visitors, the drop has sent shockwaves through the travel sector.

Politics and rising travel costs weigh on demand

Political and regulatory factors have played a role in reshaping travel behavior. Tighter border controls, more complex entry procedures and a less welcoming political atmosphere have reduced the appeal of US trips for many Canadians. At the same time, higher airfares, rising hotel rates and unfavorable exchange rates have made US vacations more expensive and less competitive compared with alternative destinations.

Airlines face weaker cross-border demand

Airlines operating transborder routes have already begun to feel the impact. Reduced demand has affected flights linking major Canadian cities with US hubs such as New York, Florida, California and Nevada. In response, carriers are cutting frequencies and shifting capacity toward routes with stronger demand, highlighting the vulnerability of cross-border air travel to sudden shifts in consumer sentiment.

Hotels and tourism regions under pressure

The hospitality sector is also feeling the strain. Cities and regions that traditionally welcomed large numbers of Canadian tourists are reporting lower occupancy rates. Border states and popular leisure destinations are particularly exposed, as Canadian visitors historically contributed disproportionately to local tourism spending. The decline is affecting not only large hotel chains but also smaller businesses across the tourism value chain.

Economic and employment implications

Fewer Canadian visitors mean lower revenues for local economies that rely heavily on tourism. The sector’s close link to employment amplifies the impact, as reduced demand affects wages, jobs and tax revenues. To cushion the blow, many businesses are adjusting pricing strategies and launching promotions to attract alternative customer segments.

Shifting demand and potential opportunities

While the loss of Canadian travelers presents challenges, it also creates short-term opportunities for other visitors. Lower demand may translate into more competitive pricing for flights and accommodation, potentially benefiting travelers from other regions and domestic tourists. Over the longer term, however, restoring cross-border travel will depend on policy clarity, improved perceptions and cost competitiveness.

As International Investment experts report, the decline in Canadian tourism to the United States highlights the sector’s exposure to political and economic uncertainty. Airlines and hotels face short-term pressure, but the situation may also prompt strategic adjustments and market diversification that reshape US tourism dynamics in the years ahead.