Canada’s Travel Boycott and What it Means for the US
| By Olivia Ernst |
US Tourism Faces Decline in 2025
The summer months are typically a popular time for foreigners to visit the United States. However, in 2025, many popular travel destinations have reported a drop in tourist numbers, with businesses feeling the impact. Most detrimental has been a decline in visitors from Canada, the US’ largest source of foreign tourism in recent years. Previously making up one quarter of all foreign travelers to the US, Canadian tourists have been crucial to the US tourist economy, contributing $20.5 billion in 2024. However, Canadian travel to the United States was down 24% during the first months of 2025, comprising the largest decline of all countries. Canada’s travel changes have not gone unnoticed. Popular tourist destinations among Canadian travelers, including Las Vegas and Minnesota, have acknowledged the drop in visitors. US businesses along the Canadian border have also seen a noticeable change. Kingdom Trails, a biking trail in Vermont, reported a 50% reduction in Canadian visitors this summer. While factors such as cost and convenience typically drive travel decisions, these recent trends have been heavily influenced by political factors.
Explaining the Reduction in Tourism
The main factor driving recent travel changes among Canadians is dissatisfaction with US policies and the overall political and economic climate between Canada and the United States. Experts argue that issues stemming from American immigration policies, increased visa barriers, trade policies, and statements challenging Canadian national sovereignty have pushed Canadian tourists away from visiting the US. Even Canada’s former Prime Minister, Justin Trudeau, encouraged his citizens to stop visiting the United States in response to Trump’s 25% tariff on Canadian goods in February. According to Abacus Data, in their February 2025 survey of 1,500 Canadians, 32% reported plans to visit the US in 2025. When asked what actions they have taken in response to recent developments in US-Canada relations, over half reported they cancelled their travel plans, with the majority shifting to another country. About 65% of participants reported that the current political and economic climate between the US and Canada made travel to the US less appealing. While dissatisfaction with the US was the main reason, some other reported reasons included a desire to support Canada’s own businesses and a concern about the weak Canadian dollar compared to the American dollar. These findings demonstrate that recent US-Canada relations have motivated Canadians not only to boycott the US but also to boost their own economy.
The Economic Fallout from Declining Tourism
Though some economic impacts of Canada’s boycott are still unfolding, the reduction in Canadian tourism has negatively impacted US businesses. Numerous business reports have noted a decrease in Canadian visitors this year, and travel to the US from Canada by motor vehicle was reportedly down by 37% in July compared to last year. These losses are compounded by reduced domestic travel. According to TD Bank, economic uncertainty and financial market volatility have decreased consumer confidence, leading to a drop in domestic travel, which accounts for two-thirds of tourism-related spending. Notably, not only are there fewer tourists overall, but travelers in the US are reportedly spending less than in previous years. Tariffs have also made the prices of certain goods more expensive, limiting travelers’ purchasing power.
Beyond business growth, reduced travel and spending also has the potential to severely impact employment. Experts argue that these travel changes can seriously impact the US tourism workforce, which accounts for 10% of all American jobs. During the first quarter of this year, job growth in the leisure and hospitality sector was the smallest since the start of the post-pandemic economic recovery. Employment in the dining and lodging industries is most at risk, but these changes also threaten jobs in retail, air travel, and education, due to fewer international students.
While the US economic outlook appears troubling, the boycott may be benefiting Canada. In recent months, some Canadian travel companies like Flight Centre Canada and Adventure Canada have reported an increase in domestic bookings. The Conference Board of Canada (CBoC) projects that the shift in travel preferences could boost Canadian’s domestic tourism by roughly $10.3 billion this year. However, Canada has also seen a drop in American tourists, its largest source of foreign visitors. Though the CBoC estimates that the loss from reduced American travel will be a fraction of Canada’s profit, some industry groups are concerned. The Tourism Industry Association of Canada, for instance, warned in a May letter to Prime Minister Mark Carney that the decline in US tourism may be detrimental to many businesses.
Persistent Tourism Losses Overshadow Modest Business Travel Gains
Canada’s travel boycott shows little promise of resolving soon. Data suggests that the political and economic climate between the US and Canada has not merely shaped Canadians’ recent travel behaviors, but also their future plans. While 32% of Canadians in the Abacus Data survey reported they would consider returning to the US once the situation improves, 40% plan to avoid the US for at least the next half a year, with 23% steering clear for over a year. These trends are set to be exacerbated by US policies making entry more difficult, such as the new $250 visa integrity fee effective October 1, which raises the total cost to $435, up from about $160.
With the political climate showing little sign of improvement, the economic impacts are likely to be significant. Forbes predicts that by the end of 2025, the US may suffer a minimum of $21 billion in lost travel-related exports. This prediction is derived from the U.S. Travel Association’s impact estimate, which holds that for every 1% drop in tourist spending, the United States loses $1.8 billion in export revenue. Meanwhile, global business travel has increased amid declining recreational travel rates to the US. Although the US ranks as the top destination for Canada’s international business travel, in the first half of 2025, Canada’s overall booking volume for business travel marginally rose by 0.18%, which only minimally offsets lost revenue from dwindling Canadian tourism in the US.
The Future of US Tourism: A Grim Outlook?
These considerations indicate a grim future for the US tourism economy. While the business travel industry may provide some relief at the macro level, it cannot compensate for the damage inflicted on US businesses and jobs heavily reliant on leisure and tourist attractions. The political and economic climate between the US and Canada is shaping not only Canadians’ current travel behaviors but also their future plans, with potentially severe and lasting impacts on the US tourism industry.
The images in this article were created using an AI image generator. All illustrations are ©Intelliwings.
