Topline
Canadian travelers are bypassing the U.S. in favor of Mexico, the Caribbean and elsewhere, but multinational travel companies are still capturing their business.
The United States has officially become flyover country for Canadian travelers, industry executives … More
Key Facts
Canadian travelers may be avoiding the U.S. but global travel companies are still getting their business, industry executives told investors on their first-quarter earnings calls.
“We see Canadians are traveling at a much lower rate to the U.S.,” Airbnb chief financial officer Ellie Mertz told investors Thursday, adding, “but they’re traveling more domestically, they are traveling to Mexico, they are going to Brazil, they’re going to France, they’re going to Japan… they are just choosing different destinations.”
Acknowledging the phenomenon as “a flyover,” Hyatt chief executive officer Mark Hoplamazian told Wall Street analysts Thursday the company saw “a bit of a cascade out of some U.S. resorts” for Canadian travelers in favor of all-inclusive resorts in places like the Bahamas, where “Canadian travelers are basically adding a boost to overall results in Q1.”
“Canadians are traveling less to the U.S., but we see them more traveling to Mexico at this moment,” Glenn Fogel, chief executive officer at Booking Holdings, told investors Wednesday, adding, “We are agnostic to where [Canadians] are traveling because usually they’re spending the same amount, just at another destination.”
On Delta Air Lines’ Q1 earnings call, company president Glenn Hallenstein noted the carrier has seen “a significant dropoff in bookings” from Canada and will “be looking at reducing capacity levels as we move forward.”
United Airlines CEO Scott Kirby told analysts first-quarter Canadian passenger volumes to the U.S. were down 9% year over year.
Key Background
Travel officials have been sounding the alarm over the drop-off in visitors from Canada, the No. 1 source of inbound tourism to the U.S. in 2024, when 20.4 million Canadian visitors spent $20.5 billion dollars at American hotels, restaurants, shops and other businesses. The number of Canadians taking road trips into the U.S.—representing the majority of Canadians who visit—dropped by 32% in March year over year, according to data from Statistics Canada, which reported a 13.5% decline in U.S.-bound air travelers from Canada that month. Inbound tourism has also fallen off from Europe (down 17%), South America (down 10%) and other regions, according to the U.S. Commerce Department. The U.S. Travel Association (USTA) calculates that every 1% drop in international visitor spending means $1.8 billion lost in export revenue annually, noting that if the trend continues, the U.S. stands to lose at least $21 billion in travel-related exports.
Big Number
60%. That’s the majority of Canadian adults who say President Donald Trump’s trade policies and political statements make them less likely to travel to the U.S. in the next 12 months, according to a Longwoods International study of Canadian adults fielded mid-April and released Tuesday. More than one-third (36%) of those surveyed had planned to travel to the U.S. in the next year but have since canceled those plans.
Crucial Quote
“If a Canadian, for example, says, ‘I don’t want to go to the U.S.’ and they go to Mexico instead, we’ll still get that booking,” Fogel told CNBC’s Squawkbox Wednesday. “It’s still going to show up on our P&L, but it’s not so great for the hotelier in the U.S.”
Tangent
A combination of factors—President Trump’s tariffs, imperialistic rhetoric and viral negative headlines of foreigners being detained by U.S. immigration officials—are “stacking up as significant hurdles for the U.S. travel industry” and “setting international travel back several years,” Adam Sacks, president of Tourism Economics, a nonpartisan Oxford Economics company tracking tourism statistics, told Forbes last month.
Further Reading
U.S. Travel Boycott: 60% Of Canadians Staying Away Because Of Trump, Survey Says (Forbes)
