Fewer international tourists are visiting the U.S. — economic losses could be 'staggering,' researchers estimate as a travel destination amid tensions tied to trade and border policy
International tourists are rethinking the U.S
Spending from foreign visitors to the U.S. is poised to fall by $8.5 billion this year as negative perceptions tied to trade and immigration policy lead overseas tourists to look elsewhere, according to a research note published by Oxford Economics.
The spending decline, which works out to a drop of about 5% relative to last year, is a result of less foot traffic. International arrivals to the U.S. are expected to fall about 9% this year, Aran Ryan, director of industry studies at Tourism Economics, part of Oxford Economics, wrote in a research note last week.
Businesses and geographies that rely on foreign tourists for commerce could be especially hard-hit.
Other estimates suggest the potential economic loss may be even larger.
The World Travel & Tourism Council said this month it expects the U.S. economy to lose a "staggering" $12.5 billion in spending from international visitors in 2025, a "direct blow to the U.S. economy overall, impacting communities, jobs, and businesses from coast to coast."
'Perceptions of the US matter' for travel
Trump administration "posturing and policy" tied to issues like border security and tariffs on long-standing trade partners have created "sentiment-headwinds" among would-be travelers, Ryan wrote.
Flight bookings to the U.S. between May to July were down 11% year-over-year as of April, signaling a "weak" outlook that's likely attributable to travelers looking elsewhere, Ryan wrote. Europe and Canada are notable laggards: Air bookings are pacing more than 10% and 33% behind, respectively.
"Travelers make choices: where and when to travel, when to book, and how long to stay and importantly, perceptions of the US matter," Ryan added.
The U.S. Travel Association projects the U.S. will lose $21 billion in travel-related revenue in 2025 if current trends continue. Each 1% drop in spending from international visitors translates to $1.8 billion in lost revenue per year for the U.S. economy, according to the trade group.
A strong U.S. dollar may also be deterring international visitors, experts said.
While the dollar has weakened in recent weeks relative to other major currencies, it remains relatively strong, they said. That makes it more expensive for many foreign travelers, since it takes more of their money to buy U.S. goods and services.
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Experts have also pointed to potential fears tied to weaker growth prospects for the global economy. Some of those worries are tied to trade barriers and uncertainty around trade policy.
President Trump has imposed or announced tariffs on several countries and products since his inauguration. Most recently, he announced a 50% tariff on the European Union on Friday, only to delay them two days later, to July 9.
Travel expert points to growing concern tied to U.S. immigration policy as perhaps the most consequential development in recent months.
"Whether fair or not, a perception is taking hold that more people are being detained, more devices [are] being searched and legal travelers [are] being deported back to their origin country," Geoff Freeman, president and CEO of the U.S. Travel Association, told CNBC earlier this month. "That creates a great deal of fear."
Heading into 2025, Oxford Economics had expected roughly 9% growth in international arrivals and a 16% boost to their spending.
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This story originally appeared on: CNBC - Author:Greg Iacurci
