The tariff waiting game is almost over for Canadians and the rest of the world.
U.S. President Donald Trump on 02APR will reveal details of tariffs that could wreak havoc on travel to the U.S. Weeks of rumours about what Canadian products might be subject to tariffs and talk about Canada becoming a 51st state have already caused a major drop in Canadian travel to the States.
Prior to the reveal, Air Canada admitted to being concerned about the dropoff in cross-border traffic to the US.
According to a presentation at an Air Canada shareholders meeting on 31MAR, Canadian bookings to the US are down 10% for the April-to-September period compared with the same period last year, MSN reports.
Air Canada flies to more US destinations than any other Canadian airline. “Am I concerned?,” Chairman Vagn Sørensen said in a response to a question from a shareholder during the meeting. “Yes, definitely, I’m concerned.”
“Am I concerned? Yes, definitely, I’m concerned.”
MSN’s story said Canada-US routes accounted for 22% of Air Canada’s passenger revenue in 2024.
Sørensen said Air Canada focuses on staying “agile,” maintaining enough flexibility to redeploy capacity when demand shifts. In that vein, the carrier recently announced a series of new flights to Europe, including a YUL-EDI route.
Although tariffs aren’t aimed specifically at the travel industry, airlines, hotels and other businesses could end up paying more for some products and the downward trend is predicted to grow.
A story from Canadian Press quotes Flair Airlines commercial vice-president Eric Tanner as saying that cross-border trips will comprise just 12% of its network in winter 2025-26, compared to 20% over the past few months.
The Miami Herald says demand for flights from Canada to South Florida has fallen about 20% compared to a year ago.
"Trump policies might cut U.S. travel growth by half," said Seth Borko, head of Skift Research, referring to a range of actions like a possible tariff war and increased uncertainty about how border agents will interpret and force travel rules.
Taking a walk on the Walsh side, in a story published by Reuters, the head of IATA, Willie Walsh said in looking at January figures, the looming tariffs had not yet hit global demand for flights.
"We'll look at March and April as we get the figures there. But certainly in the figures that we have available to us, it's not obvious that there's been an impact," he said.
Walsh’s optimism isn’t matched by the Accor hotel group, which includes Fairmont and dozens of other hotel brands. Accor on 01APR warned that forward bookings from Europe to the U.S. are down 25% this summer as travellers feel put off by Trump’s crackdown on immigration divert to other locations.
Meanwhile, it seems the US loss may be Bermuda’s gain.
"In the last several weeks, we've received 10-plus leads from Canadians seeking to relocate events from the United States this summer," Diarmaid O'Sullivan, director of sales & marketing a Hamilton Princess Hotel & Beach Club, told the BBC. "This is a mix of leisure travellers, including those planning weddings, and companies relocating business events. This represents an approximately 20% increase in forecasted revenue from the Canadian market."
