'It's insulting.' Why some Canadians are avoiding the US

Canadian travel to the United States has dropped sharply, with Statistics Canada showing February 2026 return trips from the U.S. down 13.25% year over year to 1.1 million and down 28.2% versus February 2024. A Toronto University study found an even steeper 42% median decline in Canadian visits to the U.S. between the two comparable 12-month periods. The article links the decline to political rhetoric, immigration concerns, and a weaker Canadian dollar, while noting some offset from domestic travel and alternative destinations such as Europe, Mexico, and the Dominican Republic.

Analysis

The core market implication is not just fewer Canadian crossings, but a demand reallocation inside North American leisure spend. That is more damaging to U.S. border-state lodging, casinos, outlet retail, theme parks, and regional airlines than to broad domestic demand, because the lost traveler is being replaced by a lower-spend domestic trip or a different international destination rather than deferred entirely. The second-order effect is margin pressure for operators with high fixed costs and exposure to drive-in traffic from Canada, where a low incremental occupancy rate can quickly lever EBITDA assumptions.

For EXPE, the near-term read-through is mixed: weaker U.S.-bound intent hurts transborder booking mix, but the platform can partially capture the shift toward domestic and Europe/Mexico. The key nuance is that booking value can fall even if gross nights hold up, because shorter domestic itineraries and closer-in stays usually carry lower ADR and lower commission dollars. If this trend persists into summer, the market may underestimate a mix-driven revenue headwind rather than a pure volume headwind.

The biggest catalyst is policy normalization or a softer geopolitical backdrop; absent that, the signal likely persists for months, not days, because travel behavior is sticky once alternatives are established. A meaningful rebound would require either a stronger Canadian dollar, a visible thaw in rhetoric, or event-driven travel that overwhelms sentiment. Watch for any escalation around border processing or immigration scrutiny, which would convert a soft boycott into a harder structural decline and broaden the impact across airlines, hotels, and border retail.

The contrarian view is that consensus may be overestimating the permanence of the decline. Historically, consumer boycotts in travel fade faster than in goods because convenience, family ties, and event attendance eventually dominate ideology; that argues for a tactical rather than secular underweight. Still, the market may be underpricing how much of the pain sits in locally concentrated operators and how little is offset by domestic substitution in dollars per trip.

Key Decisions for Investors

• Tactically underweight EXPE for the next 1-2 quarters only if the market is pricing a Canadian rebound; use a pair versus an online travel peer with higher domestic exposure and less cross-border mix sensitivity. Risk/reward favors a modest short if summer booking commentary confirms weaker U.S.-bound intent.
• Short border-exposed leisure operators and regional beneficiaries of Canadian drive-in traffic over a 3-6 month horizon; focus on names with high fixed-cost leverage where a 3-5% demand slip can translate into disproportionate EBITDA misses.
• Consider a call spread on EXPE into any selloff if the market overreacts to headline travel data; the company can harvest share from the rerouting of spend to Europe/Mexico/domestic, so downside should be less severe than pure-play U.S. inbound operators.
• Monitor Canadian dollar and border-policy headlines as the highest-signal catalysts; if CAD strengthens meaningfully or rhetoric de-escalates, cover short exposure quickly because the reversal in sentiment could be fast but the booking recovery should lag by 1-2 quarters.
• Use airline exposure selectively: favor carriers with stronger domestic mix and limit exposure to transborder-heavy routes until year-end, as the revenue gap from lost Canadian leisure demand is likely to persist through the summer season.