Canada Reshapes International Travel as US Tourism Loses Ground and Overseas Holiday Spending Reaches New Heights

Canada is seeing a shift in global travel. As Americans start visiting less people are travelling to the U.S., but overseas holidays are growing in popularity. In 2025 overall travel to America dropped. However, travelling abroad and domestically increased. During the first quarter of 2026 total outlays on travel abroad rose by 16.7% year-on-year to CAD$10.1 billion. While outlays on U.S. travel fell by 13.6% to CAD$5 billion. Although there saw a revival in border hopping towards the latter part of 2026, American travel still experienced difficulties due to more diverse holidays being taken by Canadians.

Canadian Travellers Explore New Holiday Options as US Tourism Faces Growing Competition

The United States has long been a preferred destination for Canadians because of its geographical proximity, convenient road connections, frequent flights and familiar attractions. However, changing travel preferences are creating a different competitive environment. Political tensions, trade disagreements, currency fluctuations and holiday expenses have become important considerations for travellers planning international trips. As a result, destinations across Europe, the Caribbean and Central America are offering attractive alternatives. Portugal provides historic cities and coastal holidays, while Costa Rica attracts nature enthusiasts with tropical forests and wildlife experiences. Aruba offers Caribbean beaches, and Fiji provides island resorts and marine attractions. These destinations demonstrate the growing range of holiday choices available to Canadian travellers.

Canadian Visits to the United States Fall Sharply as Cross-Border Tourism Weakens

Canadian-resident return crossings from the United States declined by 25.4% during 2025 compared with 2024, marking a substantial reduction in cross-border travel activity. Canadian residents made approximately 7.1 million fewer visits to America, affecting a tourism market supported by accommodation providers, restaurants, entertainment venues, retailers and transport operators. Leisure-related visits fell by 21.5%, equivalent to approximately 3.2 million fewer journeys. Although millions of Canadians continued visiting the United States for holidays, shopping, family commitments and business, the overall decline highlighted the vulnerability of American destinations to changing international visitor demand. The figures also demonstrated that geographical convenience alone cannot guarantee stable tourism activity.

September 2026 Shows a Partial Recovery but US Travel Remains Below Earlier Levels

Canadian travel to the United States began showing signs of improvement during 2026, although the recovery remained incomplete. Approximately 1.89 million Canadian-resident return trips from America by automobile and air were recorded in September 2026, representing an increase of 6.8% compared with September 2025. The improvement marked six consecutive months of year-on-year growth. Nevertheless, automobile return trips remained 31.1% below September 2024 levels, while air return trips were still 18.7% lower. These comparisons reveal that the recent increase reflects a gradual recovery from weaker travel volumes rather than a complete return to previous conditions. American tourism businesses therefore continue facing uncertainty surrounding Canadian visitor demand.

Overseas Tourism Gains Strength as Canadians Increase International Holiday Spending

Overseas travel continues attracting Canadian holidaymakers despite the changing cross-border tourism environment. During September 2026, approximately one million Canadian-resident return trips from overseas destinations by air were recorded, an increase of 3.2% compared with September 2025. The spending figures were particularly significant during the first quarter of 2026, when Canadians made approximately 4.6 million trips involving overseas destinations, representing growth of 6.2%. Expenditure on these journeys reached CAD 10.1 billion, rising 16.7% year on year. During the same quarter, Canadian visits to the United States declined by 10.6%, while spending on American trips fell by 13.6% to approximately CAD 5 billion. These contrasting trends demonstrate the changing distribution of Canadian international tourism expenditure.

Canada’s Domestic Tourism Industry Benefits from Stronger Holiday Activity

Domestic tourism has become an increasingly important part of Canada’s travel economy as residents continue exploring attractions within their own country. During 2025, Canadians made approximately 342 million domestic visits, representing growth of 1.5% compared with 2024. Domestic tourism expenditure reached CAD 81.3 billion, an increase of 8.7% year on year. Popular destinations include the Canadian Rockies, British Columbia’s coastal landscapes, Quebec’s historic cities and Ontario’s urban attractions. The momentum continued into the first quarter of 2026, when domestic visits reached approximately 69.1 million, increasing 2.3% compared with the corresponding period in 2025. Although this growth cannot be attributed entirely to reduced US travel, it highlights the strength of Canada’s domestic tourism market.

American Tourism Faces Financial Pressure as Canadian Visitor Spending Declines

The reduction in Canadian travel has created financial challenges for the American tourism industry. Canadian residents spent approximately CAD 18.8 billion during visits to the United States in 2025, representing a decline of CAD 3.3 billion compared with 2024. Leisure-related expenditure fell by approximately CAD 2.2 billion to CAD 12.1 billion. The decline affected an important international visitor market supporting hotels, restaurants, retail outlets and attractions. Border communities, including those connected through the Windsor–Detroit corridor, remain particularly exposed to changes in cross-border activity. Although August 2026 recorded a 9.3% year-on-year increase in Canadian-resident return trips from the United States, volumes remained 23.2% below August 2024, demonstrating the continuing challenge of rebuilding demand.

Canada’s Changing Travel Landscape Opens New Opportunities for Global Tourism in 2027

Canada’s evolving holiday preferences are reshaping competition across the international tourism industry. While the United States remains an important destination because of its accessibility and established tourism infrastructure, the substantial decline in Canadian visits during 2025 has highlighted the importance of attracting and retaining international travellers. At the same time, overseas destinations and domestic attractions have recorded stronger travel activity, creating opportunities for airlines, hotels, tour operators and destination marketing organisations. The gradual recovery in American travel suggests that Canadians have not abandoned cross-border holidays, but their destination choices are becoming more varied. As the industry prepares for 2027, the distribution of Canadian tourism spending will remain an important factor influencing visitor demand, destination marketing strategies and international travel growth.

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