As trade tensions bring uncertainty between Canada and the U.S., one travel agency says it's seen a steep drop in the number of Canadians booking American trips.

Amra Durakovic, head of communications for Flight Centre Travel Group Canada, said that although the U.S. is a popular destination for Canadian travellers, more are choosing to cancel or forgo their trips south of the border.

Durakovic said Flight Centre has noticed a 20 per cent increase in cancellations of trips from Canada to the U.S. Many Canadians are even willing to pay high cancellation fees.

People from Ontario cancelling U.S. travel plans over political tensions https://t.co/F51fp34TmU

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"We looked more granular into our data for Flight Centre, and we noticed that for the month of February, when we compare 2025 to 2024, there's actually a 40 per cent decrease in bookings from Canada to the U.S.," she said. "And this really aligns more broadly with industry trends."

Where are Canadians going instead?

Durakovic noticed that it's typical for Canadians who travel to the U.S. to slow their travel whenever there's a new administration.

"When you're feeling uncertain about a certain destination, it just makes it less desirable to travel to that destination, which is why Canadians are looking elsewhere," she explained.

Canadians' top three destinations are Mexico, the U.S. and places within Canada.

The U.S. Travel Association estimates that 20.4 million Canadians travelled to the U.S. in 2024, favouring states such as Florida, California, Nevada, New York and Texas. However, Durakovic pointed out that now is the opportunity for travellers to step out of their comfort zone.

"We're seeing places like Mexico and Europe right now, demand has increased," she said.

Other increasingly popular destinations include Portugal and Southeast Asia, where it's more affordable for Canadians to travel. Durakovic said there's also been an increase in flights to places like Italy and Amsterdam.

For the upcoming March break, more Canadians are heading further south, opting for Mexico, the Dominican Republic, Jamaica, St. Lucia and cruises around the Caribbean.

Canadians who cancelled their trips to the U.S. over Trump's tariff threatshttps://t.co/hEqY4I7mxn

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In an email, WestJet said it's seen a shift in bookings from the U.S. to "other sun destinations."

Air Canada plans to reduce flights to the U.S. starting this month, "anticipating proactively that there could be a slowdown."

"What we're seeing is the industry is responding," said Durakovic. "The airline remains focused on knowing where people want to go, and we will continue to fly where there is demand."

Car rentals within the country are also booking up fast, with Canadians choosing to "fly and drive" to explore domestic destinations.

The "sticker shock" of the loonie drop

All this doesn't mean that Canadians are snubbing the U.S. entirely.

"Not all Canadians are cancelling their trips to the U.S., and not all Canadians are not travelling to the U.S.," Durakovic said, adding that affordability is the main driving factor. "Because when you convert our Canadian dollars into U.S. dollars, there's quite a sticker shock there."

Flight Centre has observed declining interest in U.S. travel since November as the weakened loonie has made it more expensive for Canadians to travel to the U.S. Currently, according to XE.com, $1 USD is equivalent to $1.43 CAD

Durakovic said she's optimistic about the situation as Canadians travel to new destinations.

"I'm looking at it with optimism — we just don't know what’s going to happen," she saod. "And that's probably why Canadians are proceeding with caution right now; we just don’t know what will happen."