Key Points

Travel from Canada to the U.S. is falling, which could widen the country’s $50 billion tourism deficit.

Canada is the largest source of international tourists to the U.S.

The White House said Friday that Canadians “will no longer have to endure the inconvenience of international travel” when Canada becomes our 51st state.

Several other countries have also issued travel warnings for travelers considering traveling to the U.S.

Canadians are cutting back on travel to the U.S., and visitors from other countries may soon follow, threatening to exacerbate the country’s $50 billion tourism deficit.

Experts say the reasons for their retreat are varied, including unfavorable currency exchange rates, the U.S. political climate (given President Trump’s trade policies and his public statements about annexing Canada), high-profile detentions of people who already hold U.S. visas, long visa wait times and other policies that have heightened tensions with a longtime close ally.

“Everyone wants to join President Trump’s America,” a White House spokesperson said via email on Friday.

“Canadians will no longer have to endure the inconvenience of international travel when Canada becomes our 51st state,” and “Europeans are eager to enjoy America’s golden age if they so choose,” the spokesperson said.

In response to President Trump’s tariff plan at the time, former Canadian Prime Minister Justin Trudeau urged Canadians last month to “Choose Canada” and suggested “changing your summer vacation plans and staying in Canada to explore the many national and provincial parks, historic sites and tourist destinations across our great country.”

Cross-border travel trends and the Trump administration’s policies have worried some in the U.S. travel industry, which attracts more than $1 trillion in direct spending each year.

In a statement to CNBC, the U.S. Travel Association said there are “issues with America’s welcome, a slowing U.S. economy, and recent security concerns.”

“These challenges are real and require decisive action,” the organization said. Its members include major hotel groups, airlines and other major travel companies. The organization also said it is “actively working with the White House and Congress to advance policies that drive economic expansion and keep the United States competitive on the global stage.” ”

This involves billions of dollars of investment. Americans’ spending on foreign travel has surpassed the amount of foreign tourists the U.S. attracts.

Last year, the U.S. had a tourism deficit of more than $51 billion, according to the Commerce Department, meaning Americans spent much more abroad than foreigners who visited the country, both of which still show a deficit after deducting spending for medical and educational purposes.

The U.S. attracted more than 72 million tourists last year, but that’s still below pre-pandemic levels, according to Jefferies’ report. Canadian tourists were the largest group, accounting for 28%, followed by Mexico at 23%, the bank said in a report this month.

Travel and tourism from inbound visitors are considered U.S. exports, accounting for about 8% of U.S. exports of goods and services, the U.S. Commerce Department said.

International visitors from overseas are particularly important because they tend to stay longer and spend more than local visitors, the U.S. Travel Association said.

Some Canadians go elsewhere

Both air travel and land border crossings between the U.S. and Canada have fallen.

The number of flights returning home for Canadians fell in February from the same period last year, according to Statistics Canada. 13%, while the number of people returning home by car fell 23%.

Hotel demand is also falling in parts of the Canada-U.S. border. Data from hotel data company STR showed that as of March 15, hotel demand in Bellingham, Washington, was down 8%, and in the Niagara Falls area was down 3.5%. However, the company said that hotel demand in Florida, a top destination for Canadian tourists, was up 3% from last year.

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

For example, Canadian airline Flair said it had canceled a route that was originally scheduled to fly from Toronto to Nashville, Tennessee.

“Our network decisions are driven entirely by consumer demand – we deploy aircraft where demand is strongest and provide the lowest fares to the most travelers,” a spokesperson for the airline said by email.

Canadian airline WestJet said it has seen Canadian passengers’ bookings shift away from the U.S. to other popular sun destinations such as Mexico and the Caribbean.

“Airlines remain focused on understanding where people want to go, and we will continue to fly where there is demand,” a spokesperson said.

Read more CNBC aviation news

Travel industry executives warn that weaker-than-expected domestic bookings mean more domestic travel may not make up for the drop in cross-border travel. Bank of America reported this week that overall household credit and debit card spending in the year ended March 22 was up 1.5% from a year ago, but air travel spending was down 7.2%.

United Airlines

For example, CEO Scott Kirby said at an investor conference earlier this month that the airline cut routes in part because “a lot of it is cross-border, and Canadian traffic to the U.S. has dropped significantly,” as well as a sharp drop in flights previously targeted for U.S. government-related travel.

Lara Harbachian, who works at a digital printing company in Montreal, and eight friends had (so far) been considering several places in the U.S. to celebrate their 40th birthdays this year: San Diego, Palm Springs, California, Savannah, Georgia, or Nashville. The winner was further east: Barcelona, Spain.

While flights to Europe are more expensive than to the U.S., Habachian said it would be cheaper for her and her friends to travel to popular cities in Spain, where they don’t need to rent a car and where high-end dining and hotels are cheaper, especially with the Canadian dollar weaker against the U.S. dollar.

“I can have a 15-euro meal in the U.S., but I can’t have a $15 meal,” she said.

Trump earlier this month formed a task force to oversee the 2026 FIFA World Cup, which the U.S. is co-hosting with Mexico and Canada, with the goal of “showcasing national pride and hospitality while promoting economic growth and tourism through sports.”

Increased travel warnings about the U.S.

Another challenge facing the U.S. tourism industry this year has been the increase in travel warnings about traveling to the U.S. Germany, the U.K., France, Denmark and Finland have all issued travel warnings to their citizens planning to travel to the U.S.

These incidents were sparked by the detention of individuals even with U.S. visas and Trump’s executive order mandating that the U.S. recognize only two biological sexes, which has raised concerns among European governments about travelers whose gender written on their passports is different from their birth sex.

Germany, for example, says that “travelers whose gender input is ‘X’ or whose current gender input is different from their date of birth should contact the responsible U.S. diplomatic mission in Germany prior to entry to learn about applicable entry requirements.”

Caroline Lusby, assistant professor of tourism at Florida International University’s Chaplin College of Hospitality and Tourism Management, said travel warnings “may deter international visitors, especially first-time travelers.”

She said there is often a backlash after an event or tragedy, such as after the 2015 Paris terrorist attacks. “But many times we know that once a destination’s image changes, it takes a lot of work to restore trust,” she said.

“In terms of economic consequences, this could result in billions of dollars in losses,” she added.
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