The United States tourism industry is in critical freefall. This shockwave is particularly devastating for the businesses that rely on Canadian visitors. Compared to previous years, 2020 and 2021 have been very different, according to Joe Koenen, owner of Seattle Free Walking Tours. His average Canadian clientele has been absent this spring break, though. This loss has negatively been affecting his fish sales, revenue which has dropped at a staggering 49% this year. Koenen expressed his frustration, stating, “I am super-duper angry. I’m disappointed, but I’m more sad … it’s such a self-inflicted injury.”
The scene paints a picture that’s becoming all too common in popular cities and towns across the United States. Canadian tourists, shockingly, are nowhere to be found. Back in Orlando, Casandra Matej, the president and CEO of Visit Orlando, said that air arrivals from Canada have plummeted through May. She pointed to a significant drop-off in hotel reservations starting in early April. In particular, Las Vegas has been hit hard by the drop in domestic and international visitation. This trend makes clear just how dire the current situation is.
Decline in Canadian Visitors
The resulting drop in Canadian tourism has business owners and Canadian tourism professionals up in arms. As recent Joe Koenen noted, he has not seen one Toronto Blue Jays baseball cap all summer. He described this scenario as “unprecedented.” The loss of these once-familiar symbols illustrates just how badly Canadian tourists are needed. Typically, they descend upon U.S. sites in droves when the weather gets nice.
In one of the more unexpected announcements, Casandra Matej dropped the bomb. That translates to more than 90,200 airline seats a quarter—disappearing from Canadian bookings to the U.S.—between April 1 and June 30 compared with the same quarter last year. This loss of capacity underscores the extreme plight the tourism industry is going through right now. It equally points to the lack of demand from Canadian travelers.
Didier Arino, the general director of travel consulting firm Protourisme in France, cautioned that this is extraordinary. He remarked, “It’s happened before in a country at war, in a country where there was a security risk or risk of health crisis, but in a normal situation, we’ve never seen this kind of turnaround.” This optimism, along with apprehension about U.S. tourism’s current state, makes this sentiment run deep.
The Economic Impact
The economic consequences of this drop off have led many business owners to face untenable choices. Adam Duford is the owner of Surf City Tours, based in Santa Monica, CA. For the first time since he assumed ownership in 2021, he’s been forced to sink his own savings into the company. Calling the current state of affairs “painful,” he painted a stark picture about the struggles of people who depend on tourism to make a living.
John Brink, a business owner impacted by the slow down, has seen his real Canadian customers drop by an estimated 50%. “I personally think without the tariffs and the rhetoric and all that nonsense that we would all have made way much more money this year,” he stated. His remarks speak to the worry about larger geopolitical considerations that could be shaping the travel landscape.
As businesses continue to lose business trying to adapt to these seismic shifts, experts recently reported a fourth consecutive year of decreasing international visitation to the U.S. According to the consulting firm Tourism Economics, that translates to an 8.2% drop in international visitation by 2025, with nearly one in four fewer Canadians predicted to cross the border.
Shifting Travel Preferences
Yet, providing some hope amidst these challenges is the trend of Canadians shifting their travel dollars towards destinations other than the US. Many Americans are skipping U.S. favorites and heading to spots like Los Cabos in Baja California, Mexico. This change is particularly worrisome in light of the Inflation Reduction Act’s impact on American businesses that depend on foreign tourists.
Julia Simpson, the president and CEO of the World Travel & Tourism Council, said action now is the “most critical.” She urged U.S. policymakers to act urgently. She stated, “This is a wake-up call for the U.S. government. The world’s biggest Travel & Tourism economy is heading in the wrong direction, not because of a lack of demand but because of a failure to act.” Simpson highlighted that other countries are rolling out the red carpet for tourists. By contrast, the U.S. federal government appears intent on establishing barriers.
Michael Woody, another industry expert, agreed that recovery would take time. “That’s really a hard thing. I think what we see as our opportunity is to just stand and be ready to welcome our friends from Canada back when the time is right. The time is not right yet.”
Looking Ahead
While businesses continue to adjust to the pressures of this tough environment, most are optimistic that things will get better in the future. Mike Mondello, industry analyst at IHS, was mildly optimistic about the long-term outlook. “You won’t wake up on a Monday and say, ‘Wow, things have changed.’ It’ll keep inching its way back, I’m pretty sure.”
