News

The Potential Impact of US Tariffs

Dear Cape Breton Island – Unama’ki Tourism Partners,

I’m sure many of you are concerned about the potential impacts of US tariffs on our tourism industry for the upcoming year and possibly beyond. In the past week, we have been engaged in conversations with the Tourism Industry Association of Canada, the Canadian Destinations Leadership Council and Tourism Nova Scotia, and have been following economic specialists in the travel sector. We want to share an overview of the current situation. 

Impact Assessment
The US tariffs that were introduced and then mostly paused, while primarily focused on the trade of goods, will likely have several indirect effects on our tourism sector:

• Currency Fluctuations: The Canadian dollar has seen increased volatility, which may benefit US visitors as they will have a favourable exchange rate when visiting Canada. 
   
• Pricing Pressures: Some tourism-related imports (e.g. specialty foods) may face increased costs, potentially affecting your operational expenses.
   
• Increased Domestic Travel: Airlines and the US travel industry have already seen significant cancellations of travel to the US by Canadians. This is likely to result in more Canadians travelling within their own country. 
   
• Impact on Disposable Incomes: The Governor of the Bank of Canada has stated that the prolonged impact of tariffs may cause a recession in Canada, which will impact disposable incomes and affect travel plans for Canadians at the mid to lower end of the income scale.

Strategic Response
We have been advised that both Destination Canada and Tourism Nova Scotia are continuing their marketing campaigns in the US market as planned. Tourism Nova Scotia is also planning to emphasize the favourable exchange rate in their campaigns. At Destination Cape Breton, we are planning to focus our marketing domestically in Ontario, Quebec, Alberta and the Maritimes and aiming to capitalize on the growing desire of Canadians to travel within their own country. 

As events unfold around tariffs, we will keep you up to date on trending data, implications and recommended responses. As for now, we encourage you to prepare for the upcoming spring and summer seasons as you normally would, ensuring that your operation and your staff remain welcoming to all travellers, including our American neighbours.  

While economic conditions may present challenges, Cape Breton Island – Unama’ki’s natural beauty, rich cultures and renowned hospitality continue to be compelling reasons for travellers to visit our Island. Together, we will adapt and work toward a successful tourism year.

Sincerely,
Terry Smith, CEO
Destination Cape Breton