Canadian Travel to U.S. Remains Under Pressure

Why It Matters

The shift erodes a reliable source of revenue for U.S. hotels, forcing operators to redesign pricing and marketing to win back Canadian leisure spend amid stronger domestic and overseas alternatives.

Key Takeaways

• Canadian trips to U.S. fell 25% in 2025, 23% in Jan 2026.
• Domestic trips rose 10.9% YoY, spending $20.3B CAD (~$14.8B USD).
• Overseas trips increased 7.1%, spending $6.9B CAD (~$5.0B USD).
• U.S. hotel markets reliant on Canadians face occupancy pressure.
• “Elbows Up” sentiment pushes Canadians toward domestic and overseas travel.

Pulse Analysis

The recent data from RBC Economics and Statistics Canada reveal a pronounced reallocation of Canadian travel spend away from the United States. A 25% plunge in cross‑border trips for 2025, compounded by a 23% YoY dip in January 2026, reflects lingering fallout from the 2025 trade dispute and a heightened sensitivity to exchange‑rate differentials. The "Elbows Up" movement, a consumer‑led campaign encouraging domestic spending, has amplified this trend, prompting Canadians to favor home‑grown experiences or farther‑afield destinations where the Canadian dollar’s value is less punitive.

Domestic tourism is now the engine of growth for Canada’s travel sector. In the second quarter of 2025, Canadians took 90.6 million trips within the country, up 10.9% YoY, and spent roughly $20.3 billion CAD (about $14.8 billion USD). Overseas travel also gained traction, with a 7.1% rise in trips and $6.9 billion CAD (≈$5.0 billion USD) in expenditures. This diversification not only cushions the Canadian economy from external shocks but also reshapes the competitive landscape for airlines, car‑rental firms, and hospitality providers that once relied heavily on U.S. corridors.

For U.S. hotel operators, especially in Florida, Nevada, Arizona and gateway cities like New York, the Canadian market’s volatility translates into measurable occupancy gaps. Some destinations have responded with parity pricing that treats the Canadian dollar at par with the U.S. dollar, aiming to neutralize currency disadvantages. Yet the longer‑term challenge lies in rebuilding a compelling value proposition that can compete with the allure of domestic and overseas alternatives. Strategic pivots may include tailored loyalty programs, joint marketing with Canadian tourism boards, and flexible rate structures that address both price sensitivity and evolving traveler preferences.