Travelers Changing Vacation Preferences
President Trump’s tariffs are only beginning to send negative ripples through the Canadian economy. It’s still early but it looks like Canadians will increasingly alter their travel plans away from the US.
Today, as Ontario Premier Doug Ford visited the US White House with the Canadian trade minister, Trump reiterated his derogatory stream that the US doesn’t need anything Canada offers. Canada may be on the path to a new international business focus. The pace of that might be quickening.
While the attention is on Trump, a trend in trip cancellations was already underway last November according to Flight Centre spokeswoman Amra Durakovic. Her data shows a 20% increase in trip cancellations to the US in the last 4 months, as the USD CAD rate has made US travel very expensive for Canadians. Bookings are down too.
It might seem that it’s only due to a US tariff reaction, however Trump’s continuous derogatory remarks about Canada, and the weak Canadian dollar are part of the anti-US sentiment. The cost of flights, airport transport, car rentals, hotel bookings, and tours are prohibitively expensive, and that may not ease in 2025.
“This anti-Trump sentiment is really playing a huge role here, where people are saying, ‘I’m not going to the U.S., I’m just not going to travel there based on what he’s doing to us in Canada,”‘ said Martin Firestone of insurance firm Travel Secure Inc.
And here’s the thing, the US economy will grow strong, thus the Canadian dollar is likely going to stay low. If demand for oil stays low and prices fall there is little to buoy it. The CAD outlook isn’t great.
The tariffs have been played up as a catastrophe, however, for wise Canadian travel entrepreneurs and agencies, it spells new opportunity. I say that because, when change happens, travel consumers become more open to new destinations, products and suppliers. Any travel agency that is never seen or heard from can leverage this disturbance in traveler habits to capture new customers.
Low CAD/USD Rate a Big Issue
In a CityNews report today, Ana Durakovic of Flight Centre said “What we’ve seen this last month, that’s something we’ve never seen before. This is certainly quite a significant decrease… What we have noticed is Canadians are not cancelling their travel trips altogether; they’re just looking to alternative destinations.”
And in that same report, WestJet Airlines is quoted as saying “We have observed a shift in bookings from the U.S. to other sun destinations such as Mexico and the Caribbean among Canadian travelers… I will say as to travelling, Canadians are fairly conservative. Our top three destinations come as no surprise: Mexico, Canada and the U.S. So, maybe this is what we needed … to explore new places.”
And it’s not only the dollar and politics that’s changing Canadian Traveler habits.
2025 Blue Cross Travel Study found that 36% of Canadian travellers have already reduced their trips. One-third (35%) of travellers say they are seeking less expensive accommodations or destinations, while 31% report taking advantage of off-peak seasons to save money. 25% are choosing destinations closer to home or are taking shorter trips (22%), and 12% of them are taking buses or trains to offset expenses. The study found 47% were expecting less travel to the US, but we’d have to believe that number has risen today.
Top choices so far in the winter appear to be Mexico and the Caribbean, likely due to the proximity and tropical climate, not to mention some excellent Mexican resorts and Caribbean resorts to enjoy. Duravik notes an increase in trips to Europe, Japan, and Asia. Costa Rica may be a benefactor as well. It should be noted that Canadians are conservative and likely will prefer comfortable destinations where English is spoken.
US Tourism Industry to be Impacted
The drop in Canadian tourists is a big concern in Maine, Florida, and Arizona which are highly dependent on Canadian travel spending. Not all Canadians however are cancelling their trips, but may not be booking as they usually do. Some of the charm of visiting the US has worn off, and this might slide further.
President Trump will use reciprocal tariffs to get other nations to drop their high tariffs and duties on US exports. Until trading partners agree to eliminate their US tariffs, we’ll see the reduced Canadian travel market, and the current trend of avoiding the US. US-bound trip bookings will be much weaker. US travel agencies however won’t be impacted as much, and the trend in the US itself as the USA travel sector reports showed, is to domestic travel in 2025.
However, many US travelers will look to Canada for a great vacation given the 40 cent bonus on the USD CAD exchange rate. So the summer 2025 travel season might not be all that bad. Travel agencies should be gearing up for more domestic travel by Canadians.
There is no way to determine how long the tariffs will last, as the Canadian government will use every possible tactic to strike a deal with the US President. Hopefully, that will evolve and trade will continue.
Still Time to Capitalize on this Year’s Big Trend
Still, travel advisors and travel companies should capitalize on the Canadian trend to book vacations outside of the US. It’s wise to update your marketing and content strategy, along with SEO to attract these travelers who are searching for alternatives.
It’s an interesting time for those who are creatures of habit, as they embark on a new destination experience. Change is healthy and this could launch a new era for Canadian travel companies. And there are Canadian business people venturing out into the world on business trips to find new trade partnerships. Some may be looking to start ventures in the Caribbean, South America, Europe, Asia, and Mexico.
Are you ready to be discovered by all of these groups online?
A new powered up travel marketing campaign featuring high-visibility and impact generating content is the perfect choice.
Contact Gord at 416 998 6246 to discuss the Great Canadian Opportunity.
