Though President Trump has been in office for a little over two months, sweeping changes in his international relations policies have created huge economic impacts, not least of which is the impact on the tourism industry in the United States.
With both heavy tariffs and the threat of invasion impacting relations with our north-of-the-border neighbors, Canadian travelers are opting to spend their tourism dollars elsewhere.
Aviation analytics company OAG reported that travel to the US from Canada is down 70% year over year. Comparing flight bookings from March 2024 to March 2025, the firm noted that the decline is a concern for the airline industry. But it’s also bound to impact the tourism industry as a whole in the US.
This may be more bleak news for retirement savers. Combined with the shaky stock market, those with significant investments in short-term rental properties and other retirement assets tied to the travel industry may see their nest eggs shrink as tourism numbers continue to fall.
Tourism is a major contributor to our GDP, standing at approximately 2.36 trillion as of 2023, according to Statista. It’s also a major job creator, especially in popular destinations like Florida and California.
Last year, the International Trade Administration expected the US to have 91 million international annual visitors by 2026.
Now, with Canada and a number of European countries issuing travel warnings for the US, the number of inbound international tourists will decline sharply. One Mile At a Time reports that research firm Tourism Economics has changed its forecast from an expected 8.8% increase for 2025 to a projected 5.1% decline — a 13.9% shift in demand.
Airlines are already cutting scheduled flights across borders, and travel writer Ben Schlappig projects it may be difficult to bounce back from, saying, “there’s only so much that can be done to stimulate domestic demand beyond what it already is.”
Tourism is also in question due to safety concerns. Following the reduction of air traffic controllers and a number of reported plane accidents, confidence in domestic travel has taken a tumble.
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The ripple effect of this drop in travel demand could be massive. Those who own shares of airline stock, for example, are directly affected by the industry’s success.
And some stock prices are tumbling. American Airlines, the largest player in the US, has seen stock prices fall from a high of nearly $19.00 in January to a current low hovering around $9.00.
Real estate may also suffer in this new travel climate. Investments in commercial real estate, such as hotels and resorts, and in residential real estate, like vacation homes, can lose favor.
A report from CNN Business shows that Canadians are the top foreign buyers of US properties, accounting for 13% of all home purchases in 2024 (mostly in Florida and Arizona).
For those who live in areas that are popular with Canadian snowbirds, the value of their own home may decline as demand lowers, causing property values to fall. If selling your primary residence forms a large part of your retirement plan, you should look to other, more fool-proof safeguards like diversifying your portfolio to ensure you aren’t losing out on earnings.
In addition to airlines and real estate, the service and hospitality industries may also take a downturn. For many would-be retirees, this could affect their finances post-retirement.
The Pew Research Center reports that 19% of adults ages 65 and older are employed as of 2023, compared to only 11% in 1987, and that “bridge jobs” often in the service industry continue to be popular for older workers. This growing desire to work past retirement age will probably only increase with rising inflation and a shrinking economy. If fewer jobs are available, retirees might find it increasingly difficult to make ends meet.
So what can be done to ensure your retirement savings aren’t impacted? Beyond diversifying your portfolio, it’s a good idea to review your investments and consider the long-term value of any travel-related assets, without defaulting to panic-selling.
You should also consider your retirement plan as a whole. Are you planning to take a part-time job to help meet expenses? The closer you are to retirement, the more important it is to ensure your skills are up-to-date and relevant to the type of work you’ll want to do.
If you’re planning to travel in retirement, you might also review those plans and make adjustments. No matter what the future has in store for tourism in the US, a solid financial plan will help you weather the economic storm.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
