FROLITICKS

Few people really understand the importance of tourism on their economy, in particular with respect to employment, revenue and taxes.  The Gross Domestic Product (GDP) contribution of tourism to the U.S. economy went from $2.36 trillion in 2023 to $2.5 trillion in 2024.  In 2024, this represented about 9% of the U.S. economy.  By 2034, the industry estimates that tourism will continue to grow to represent almost a 10^th of the country’s total GDP.  Total direct and indirect U.S. employment related to tourism is estimated at more than 20 million people, close to 10% of the labour force.  Many work in the accommodation, food services and travel sectors.  This compares with the manufacturing proportion of the labour force at 7.5% in 2024, representing about 13 million workers.

However, 2025 has so far seen a serious decline in the number of Canadian tourists visiting the U.S., largely due to the political and economic policies of the Trump administration which placed tariffs on a number of Canadian exports.  Let’s also not forget Trump’s assertions that Canada should become the 51^RST state which angered a large number of Canadians.  In addition, tourism to the U.S. is already stressed by the continuing high exchange rate versus other currencies, including the Canadian dollar.  This decline is particularly pronounced in specific segments, with Canadian overnight land trips falling by 26%, indicating regional tensions affecting traditional travel corridors.  As a result of bordering with the U.S., there has always been a significant amount of travel between the two countries, most notably within the northern U.S. states which rely most heavily on Canadian tourists.

The World Travel & Tourism Council’s projection of a $12.5 billion loss in international visitor spending represents the most significant challenge facing the sector.  This decline affects not only major metropolitan areas but also rural communities that depend on tourism revenue for economic sustainability.  The most significant drop has been in Canadian visitation which has seen a 20.2 % decline so far this year.  In 2024, Canada had maintained its position as the leading source market with over 20 million visitors.  However, Canadian visitors returning from the U.S. by land plunged 31.9% year-over-year in March 2025, while air arrivals fell 13.5%.  In general, the tourism landscape in America during 2025 presents a complex narrative of recovery and decline. The projected annual loss of $12.5 billion in overall international visitor spending represents more than just statistical data — it reflects a fundamental shift in global travel patterns that directly impacts communities, businesses, and employment across the nation.

In both the U.S. and Canada, tourism is an important expanding sector, representing more employment potential than even in the manufacturing sector.  This fact appears to be something loss on members of the Trump administration, who fail to see the negative impact of their trade relations on this sector.  It’s difficult to say when a turnaround might occur with respect to Canadian tourists, particularly since governments and businesses in Canada are greatly promoting the idea that Canadians should travel and vacation in Canada.  In addition, Canada is currently promoting international visits by persons from other countries to Canada in lieu of visiting the U.S.  Since Canadians were number one in terms of visitors to the U.S. in the past, unfortunately there is little doubt that American tourism businesses are now feeling the direct impact of this decline.  Again and again, our southern neighbours, particularly in border states, have expressed their disappointment.  They have also expressed their understanding as to why more Canadians are holding off on visiting their country, given the current policies of the Trump administration.  All in all, the whole situation is truly regretful given the traditional, friendly and close relationship between the two countries and its peoples.