US tourism officials sound alarm, tourist flights to US sink 70% and could impact up to 140k hospitality jobs and $14B in economic spending
Here is my way of trying to find alpha in an erratic stock market - how I'm trading the US tourism dip.
**1. Canada is the US's largest source of tourism**: In 2024, 20 million Canadian tourists visited the US, spent $20.5 billion, and supported 140,000 US jobs. Canada's population is 40 million, so 50% of the entire country visited, and the US had 77 million tourists so 1 country is contributing 26% of visits.
**2. Recent US policies is leading to a tourism boycott from Canadians, and the rest of the world**: Tourists are boycotting US tourism due to tariffs, annexation threats, new travel barriers, and stories of visitors being unlawfully detained with no due process (in March a Canadian citizen was denied entry due to an expired visa, while this was a worker and not a tourist, instead of being allowed to return to Canada, as is the norm, she was shackled in chains and sent to a private ICE facility for 2 weeks without being able to contact a lawyer or get a bed).
**3. Analysts previously predicted policies would decrease tourism by 5%, new numbers released this week show that it's 14x higher:** For Canada alone (26% of US's entire tourism industry with 20 million visitors) - airline travel is **down** **70%**, land travel is **down** **45%**, and **85%+** of tourists survey say they cancelled their US trips.
**4. Here's how I'm planning on using this information to make stock trades into specific companies both long and short:** I'm shorting airlines that have high exposure to Can-US routes (it's been reported that airlines are slashing these routes due to 0 demand, and they is no clear way they can cover this revenue gap with a lower utilized fleet). I'm shorting select hospitality chains (hotels, restaurants) with high exposure/retail foot print in US states that border Canada like Niagara Falls. The US travel association says that even just a 10% dip in tourists will lead to $2 billion in economic losses and 140,000 jobs at risk (assuming 70% decrease from air travel happens across the board, that's $14b), I expect hospitality to have lower revenues. I'm shorting all non-essential or higher price retailers with a big footprint in hostility states, all these workers being laid off by lack of tourism + the fed job cuts won't have as much to spend (not my specific trade, but an example would be short Target, long Dollar General).
I'm long, and buying, non-American/Europe hotel chains and travel booking platforms that get most of their revenue outside the US, as I expect Canadian and international tourists to concentrate their spend to Europe/Asia/Oceania travel this summer.
Would like to hear what everyone thinks about this trade play. Thanks!
**Source for numbers used**
* [https://theconversation.com/tourists-are-cancelling-trips-to-the-us-heres-how-this-could-affect-its-economy-252858](https://theconversation.com/tourists-are-cancelling-trips-to-the-us-heres-how-this-could-affect-its-economy-252858)
* [https://www.ustravel.org/press/potential-results-decline-canadian-travel-united-states](https://www.ustravel.org/press/potential-results-decline-canadian-travel-united-states)
* [https://www.nytimes.com/2025/03/28/world/canada/air-canada-flights-seats-us.html](https://www.nytimes.com/2025/03/28/world/canada/air-canada-flights-seats-us.html)
* [https://financialpost.com/news/canadian-us-shopping-trips-dwindle](https://financialpost.com/news/canadian-us-shopping-trips-dwindle)
* [https://www.discovercars.com/blog/us-travel-tourism-statistics](https://www.discovercars.com/blog/us-travel-tourism-statistics)
* [https://globalnews.ca/news/11080371/canadian-woman-detained-ice-example-immigration-border/](https://globalnews.ca/news/11080371/canadian-woman-detained-ice-example-immigration-border/)
* [https://www.express.co.uk/news/world/2028592/us-tourism-suffer-billion-drop-donald-trump](https://www.express.co.uk/news/world/2028592/us-tourism-suffer-billion-drop-donald-trump)
