Nicholas Ratcliffe, an information and technology professional, enjoys planning and structuring holiday trips that it made perfect sense for him to start his own travel agency as a side hustle. Since 2021, his travel agency, Side Quest Vacations, catered to domestic travelers and international visitors already in the country looking for personalized itineraries as well as groups of around 100 members organizing church missions and school trips.
But last year, the number of Side Quest’s clients fell from 15 per year to 8 or about half.
“The demand is not there,” Ratcliffe said, adding that he would soon close the business. “You have to work harder to make even small sales, and it’s just not worth it.”
Ratcliffe’s independent travel agency is just one of many businesses hit by the weakening travel and tourism sector last year. One of his agency’s service providers went bankrupt, he said, while others were bought by larger companies.
The country is losing its post-pandemic momentum in travel and tourism, and it’s further strained by broader economic conditions and immigration policies under President Donald Trump. Rising costs and tighter job markets meant people are conserving cash and travel is slipping down their priority list. Stricter visa regulations, immigration uncertainties, and Trump’s aggressive language toward other nations like Canada are also dampening the country’s tourism appeal.
Tourism reluctance is weighing heavily on industries reliant on a steady demand. Businesses are starting to feel the pinch.
Foreign visitors spend billions of dollars in the U.S. each year, but their spending dipped 5.5% in September compared to the previous year. At the same time, travel imports — or goods and services Americans purchase while traveling abroad — rose in 2025 compared to the previous year. Canada makes up at least a quarter of foreign visitors to the U.S.
This means a softer demand from international visitors while Americans are spending more money for overseas travel.
Some industry experts said the plummeting inbound tourism should be a “a wake-up call” for the U.S. government. “While other nations are rolling out the welcome mat, the U.S. government is putting up the closed sign,” said Julia Simpson, president and chief executive officer of World Travel & Tourism Council (WTTC), a London-based organization that reviews the economic and social contribution of the industry.
The U.S. is the only country seen to record a decline in international visitor spending in 2025, according to a WTTC report.
The costs and benefits to the sector affect other industries, such as fuel and food services. Cities and states that share borders with Canada, in particular, are most hurt by the absence of their neighbors who comprise the largest share of foreign visitors to the country.
Democrats on the bicameral Joint Economic Committee released a report in December showing how the Canadian tourism slump is “harming” local businesses.
“In the wake of President Trump’s reckless tariffs and needless provocations, fewer and fewer Canadians are making trips to the United States, putting many American businesses in jeopardy and straining the close ties that bind our two nations,” said Senator Maggie Hassan in a statement.
Canadians’ return trips from the U.S. dropped year-over-year for 10 consecutive months, from January to October, according to data from Statistics Canada, the country’s central statistical agency. While this is not the first time in history such a trend emerged — numbers also dropped after 9/11 and the 2008 financial crisis — the current trajectory is noteworthy because of its length.
Latest data as of October showed Canadians’ U.S. trips plunged 23.8% by air and 30.5% by car. This can be seen as a direct result of Canadians’ boycott of American goods, stemming from trade disputes and Trump’s threats to annex the country.
“When our neighbors stay away, our margins disappear,” said Kyle Daley, owner of Solomon’s Store in West Stewartstown, N.H., which shares a border with Quebec. Solomon’s Store is a family-owned grocery that has been operating for over a century and four generations.
“In groceries, those margins are vanishingly small to begin with,” he said.
Many Canadians have also been shifting travel plans to other destinations, and airlines are taking notice. Air Canada and WestJet, scaled back routes to the U.S., moving their capacity to Europe and the Caribbean. Porter Airlines pulled back on advertising its American destinations for fear of public disapproval. Sunwing Airlines, a low-fare subsidiary of WestJet, has dropped all of its U.S. flights.
To uplift the industry, states including Florida, California, and Montana launched campaigns specifically targeting Canadian travelers.
But Canadians don’t seem to buy it.
“There’s quite a few people that I know of that are not traveling trans-border and will not until there’s a change in policy or a change in president,” Paula Zamorano, a resident of Calgary, said.
For the past six years, Zamorano traveled to the U.S. with her school-age son at least six times each year. It was a privilege she enjoyed as a customer service employee at WestJet, Canada’s second-largest airline. She would also occasionally drive down to Montana, the only U.S. state bordering her home province of Alberta.
But it has now been over a year since her last trip. “I don’t have any intention of traveling to the U.S. anytime soon either,” she said, pointing out that she feels “unsafe” visiting the country because, while she was born in Canada, her parents are immigrants from Chile.
“You see a lot of news reports about people being deported, and they’re not even from the country that they’re being deported to,” she said. “They don’t care where you’re from, only that you’re not from there.”
Over Thanksgiving, key industry indicators also posted their lowest levels.
Data from the U.S. Travel Association showed that domestic air trips went down by 0.7%, a contrast to the Federal Aviation Administration’s forecast of having the “busiest” Thanksgiving travel period in 15 years. Hotel room demand also fell by 2.1%, its steepest fall since the pandemic.
“It’s a little bit of a lost year,” Jan Freitag, the national director of hospitality market analytics at CoStar, a property research organization, was quoted as saying in The New York Times. “Every quarter we’ve revised our forecast down.”
Industry projections for the year are mixed: Some are optimistic that the World Cup and America’s 250th Anniversary celebration would entice more tourists. Others are more cautious that new visa hurdles, like the $250 mandatory integrity fee, and high travel costs would push America’s share of the tournament’s economic windfall toward Canada and Mexico, co-hosts of the event, where early hotel demand is already showing strength.
“Rates are already high, but fans might be holding off until travel becomes easier and match details are final,” said Milos Eric, co-founder and general manager of OysterLink, a listings website for the hospitality sector.
“The World Cup will create enormous opportunity,” Eric added. “But only for markets that stay flexible.”