US braces for a $12.5-billion chill in summer travel as foreigners give America a miss

Time of India

6 hours ago

It was supposed to be a big year for travel in the
United States
, with airlines and hotel companies projecting strong growth. But with the summer travel season about to start, it has instead become a year of uncertainty.
Canadian travel to the United States is down for a third consecutive month, falling 15.2% compared with April of last year. Airlines have reduced fares in response to softening demand. U.S.-based hotel chains Marriott, Hyatt and Hilton say they are experiencing slower growth, and all three have lowered their revenue outlook. Airbnb expects growth to ease in the second quarter, and Expedia downgraded its expectations for booking and revenue growth.
"Unpopular policy decisions, whether it be related to Ukraine or trade, are having an effect and the brand of the country has taken a beating," said Adam Sacks, president of research firm Tourism Economics, which projects a 9.4% decline in international arrivals to the United States for 2025. At the start of the year, the company was expecting a 9% increase.
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An earlier New York Times analysis found that international travel to the United States had declined only modestly through April, with the exception of arrivals by Canadians, which were down sharply.
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But, as that article noted, travel analysts were uncertain whether the numbers would hold up and "the situation could worsen if economies are further weakened by the trade war or if anti-American sentiment rises."
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Increasingly, it seems, political and economic confusion created by the
Trump
administration's "
America
First" agenda is causing both domestic and international tourists to reconsider their plans. Foreigners are canceling trips in response to threats of steep tariffs on U.S. trade partners, polarizing rhetoric and an immigration crackdown that has resulted in tourists being detained at the U.S. border. American travelers are cutting back over fears of a recession and job insecurity.
"U.S. demand was soft, driven by declining consumer sentiment, and we saw pressure on key inbound U.S. corridors," Expedia CEO Ariane Gorin told investors this month.
Bank of America's credit card and debit card spending also shows softening in travel spending across all income groups. With fewer Americans planning expensive trips abroad, domestic travel, which is generally cheaper, is up 3 percentage points. According to the bank's Summer Travel and Entertainment Outlook report published last week, 70% of Americans planning trips are opting for domestic travel.
On the international front, arrivals from most of the 20 top tourist-generating countries such as Britain and Germany actually rebounded after a steep drop in March, with a 0.4% year-over-year increase for April, according to U.S. Department of Commerce data. The decline in March can be attributed, in part, to the fact that the Easter holidays, which are particularly popular in Western Europe, fell later this year.
Still, the number of visitors from France, normally a reliable source of tourists, remained lower than expected in April, with arrivals down 12.2%. (The data did not include arrivals from Canada, the top source of travelers to the United States.)
Sacks anticipates more pain. "We believe that pure leisure travel will be the most reactive, and we're not quite in the peak window yet," he said. "I expect as we get into May, June and July, the effects will be more pronounced."
Monique Dubas, 35, an engineer from Paris, canceled a June trip to New York to show solidarity with a French scientist who was denied entry into the United States in March after immigration officers searched his phone and found messages deemed to be critical of President Donald Trump, according to French authorities. (The Department of Homeland Security later said the decision had nothing to do with Trump. )
"This is wrong and should not be accepted," Dubas said. After paying expensive cancellation fees, she changed her destination to Mexico. "I love America, but there are many more inviting places to go right now," she said.
Canadian travelers are, by far, the biggest loss. Arrivals have declined significantly for a third consecutive month as Canadians continue to boycott the United States in reaction to tariffs and Trump's comments on annexation. In April, the number of Canadians returning from the United States by car fell 35.2% compared with the same month in 2024, and returning Canadian airline passengers fell by 19.9%, according to the latest data published by the government office Statistics Canada.
A $12.5 Billion Loss
The tourism industry projects a drop in international visitors that will cost the United States $12.5 billion in travel spending this year, falling to less than $169 billion from $181 billion in 2024. That's a 22.5% decline from the prepandemic peak reached in 2019 and sets the United States apart as the only country among the 184 analyzed that is forecast to see an international visitor drop in 2025.
"People are worried that their devices are going to be searched and that there is a risk of deportation before you even get into the country," said Geoff Freeman, CEO of the U.S. Travel Association. "What is most concerning is that to this date, we have not done anything to counter that fear and send a message that we want travelers to come."
Freeman stressed the urgent need for a coordinated marketing strategy to shape more favorable perceptions of America before the current ones become ingrained. Pointing to upcoming events -- the 250th anniversary of the Declaration of Independence next year, the 2026 FIFA World Cup and the 2028 Summer Olympics -- he said the government needs to set a goal for how many of the world's travelers it wants to attract and then develop a way to achieve that aim.
"In the absence of doing that, we are just responding to this problem here, this problem there and losing billions upon billions of dollars," he said.
The National Travel and Tourism Office, part of the U.S. government's International Trade Administration, did not respond to multiple requests for comment.
Brand USA, a nonprofit destination marketing organization partially funded by the federal government, was recently shaken by the abrupt dismissal of five board members by the Trump administration. It said it is preparing "a bold global tourism campaign" that will be launched in June to "showcase the best of the USA from small, rural communities to iconic destinations" in advance of major events such as the FIFA World Cup.
"Whether visiting for sporting events or memorable holidays, the USA remains the world's most aspirational destination for vacationers," said Chris Heywood, the organization's senior vice president of public relations.
Looking for Strategies
The tourism agencies for popular destinations such as New York and California updated their projections this month to reflect an anticipated decline in visitors. New York City Tourism and Conventions entered the year with optimism, forecasting 67.6 million international and domestic visitors, but that number has fallen to 64.1 million, a 350,000 decline from last year. Visit California expects overall visitation to drop by 1%, to 268 million.
Both agencies have developed new campaigns to combat negative sentiment. Visit California has partnered with Expedia in its "California loves Canada" campaign, offering Canadians up to 25% off hotels, activities and attractions. Similarly, New York City Tourism and Conventions is running a campaign abroad called "With Love + Liberty, New York City."
Jessica Walker, president and CEO of the Manhattan Chamber of Commerce, said local businesses are being buoyed by an increase in domestic tourism. However, there are concerns about the expected international shortfall, especially as foreign travelers tend to stay longer and spend more.
"A lot of businesses are just getting over COVID and the debt they had to pay down," Walker said.
Air Travel Lagging
On the airline front, both international and domestic fares have been falling, indicating weaker demand. Ticket prices fell 5.3% in March compared with the previous year, according to the U.S. consumer price index. Looking ahead to the summer, the average domestic ticket is down 7%, according to the Airlines Reporting Corporation, whose data covers about two-thirds of global sales.
While domestic air travel is up 4% this year, fewer Americans have made international summer plans; outbound travel to the top 10 international destinations, which include Mexico and Canada, is down 3% compared with last year, while all international tickets are down 6%, according to ARC.
The European Travel Commission, which represents tourism organizations across the continent, said it is bracing for a dip in American travelers.
Major U.S. airlines, including Alaska, Southwest, Delta and JetBlue, have recently pulled their 2025 forecasts, citing economic uncertainty. United is lowering international and domestic capacity and axing routes, but said the ebb in demand has partly been offset by the strength of premium cabin bookings, which have continued to rise.
Upscale on the Rise
Indeed, the one segment that has so far managed to withstand the volatile economy is luxury travel. Virtuoso, a network of upscale travel agencies, said summer demand is up 23%. "The U.S. is our No. 1 destination, and domestic travel is still holding really strong," said Misty Belles, the company's vice president of global public relations.
Looking beyond the summer, Sacks said the United States remains a highly desirable destination, with "unique experiences and attractions that will remain attractive for long after this presidency is over."