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Yahoo
01-05-2025
- Business
- Yahoo
Where Mastercard sees opportunity as U.S. travel craters
One of the early impacts of President Donald Trump's tariff policy has been a decline in people traveling to the U.S., a response that reduces some cross-border payments but not all, according to Mastercard. "What is not coming into the U.S. is going to other regions," CFO Sachin Mehra said during Thursday's earnings call. Foreign travel to the U.S. fell 14% in March, according to the most recent data from the U.S. Travel Association, noting that the drop came before the April 2 tariff announcement. That followed a 2% decline in February, the first such fall since spring 2020 during the early days of the COVID-19 pandemic.. The declines have been attributed to political opposition to Trump's policies. An April 10-11 survey of Canadians found 60% were "staying away" from the U.S. due to the president's policies, according to Longwoods International. During Thursday's earnings call, Mastercard said its cross-border payments and travel revenue sources are diversified. Like most payment companies, Mastercard said the impact of Trump's tariffs have not yet affected overall payments. But it did note international travel declines in March and through the first three weeks of April. Much of that decline has been in U.S.-bound travel, Mastercard said. Other corridors, particularly within Europe, the Middle East and Africa and the Asia Pacific, have grown in recent weeks. The payment company's overall travel volume has "shown stability," but there have been shifts within the category, Mehra said. In a research note before Thursday's earnings report, Jeffries said inbound U.S. travel is 4% of Mastercard''s net revenue. A decline in inbound travel of 20% — Jeffries estimate — would not pose a risk to Mastercard's second quarter or full year 2025 outlooks but would "keep a lid" on the company's stock price. Mastercard has embedded flexibility into its existing 2025 strategy to anticipate economic and political uncertainty, CEO Michael Miebach said during Thursday's earnings call. Mastercard also touted its artificial intelligence investments as a way to broaden revenue sources. The card network this week launched Mastercard Agent Pay, a platform that expands Mastercard's existing generative AI technology, which enhances customer service, security and onboarding by generating automated responses to customers. Agent Pay digs deeper into the card network's data and AI tools to help shoppers curate a mix of purchases for an event, assist merchants on supply-chain management or help a retailer build a marketing or sales program, Mastercard said. Agent Pay uses agentic AI, or a form of artificial intelligence that aims to reduce or eliminate human supervision. The card network is partnering with Microsoft to scale the platform, with other partners including IBM, which is contributing B2B technology, and payment firms like PayPal's Braintree and for security. The card network relies on its global payment network of issuers and merchants to accrue payment information that can feed AI engines. "We have access to enormous amounts of data," Miebach said, noting AI enables one of every three service products. In another move, Mastercard expanded an existing partnership with payment firm Corpay, including a 3% stake for Mastercard. Corpay will be a preferred provider of currency risk management and integrated payment technology for Mastercard's financial institution clients. Mastercard and Corpay will also extend an existing collaboration on virtual cards. And Mastercard's Move disbursement service will be available to Corpay's customers, including small to medium-size businesses. Eighty-five percent of Mastercard's service, or non-payment, revenue is recurring, Miebach said. Recurring revenue is considered safer from volatility due to economic shifts, which can cause short-term declines in payment volume. "It's a stable baseline for growth," Miebach said. For the quarter ended March 31, Mastercard reported net income of $3.3 billion, up 9% from the prior year, and net revenue of $7.3 billion, up 17%. Adjusted earnings per share were $3.73, up 16%. Those results were better than Wall Street analyst expectations of $7.13 billion in net revenue and adjusted earnings per share of $3.57, according to a Zacks Investment Research survey. Cross-border volume for the quarter was up 15%; global gross dollar value was $2.4 trillion, up 9%; U.S. GDV rose 7%; and total cards in the market were 3.5 billion. Mastercard affirmed its 2025 outlook, calling for net growth revenue at the high end of the low teens. "While there is uncertainty in the world, we've built a diversified, resilient business model and proven strategy that enables us to effectively navigate various economic environments," Miebach said in prepared remarks. In a research note following the earnings release, Jeffries analysts' said Mastercard's earnings were a "clean beat" and it maintained its buy rating, though Jeffries added the company's cross-border payments growth had slowed more than Visa, due to a slower pace of travel purchases. Investors are looking for signals that Trump's tariffs and related concerns will cause consumers to reduce spending, particularly on discretionary items such as travel and dining. Among other payment companies, Visa said consumers have been "resilient," though it also reported a slump in travel payments. PayPal said it has flexibility to shift strategy if necessary and can offer buy now/pay later and merchant credit to consumers and merchants if the economy sours. And American Express said it is not planning to change its product updates, noting consumer payments have held strong. Block reports earnings Thursday afternoon. Wolfe Research and Mizuho both said Thursday that Mastercard and Visa's spending trends into April showed no clear slowdown in U.S. payments. Sign in to access your portfolio
Time of India
29-04-2025
- Business
- Time of India
New survey reveals why 60% of Canadians are avoiding U.S. Travel and how they view President Donald Trump
In a dramatic development that highlights the convergence of politics and global travel, a recent study has concluded that 60 per cent of Canadian adults won't be heading to the United States in 2025 because of increased political tensions and contentious rhetoric from American President Donald Trump. #Pahalgam Terrorist Attack The groundwork before India mounts a strike at Pakistan India considers closing airspace to Pakistani carriers amid rising tensions Cold Start: India's answer to Pakistan's nuclear threats The research, carried out by Longwoods International, identifies increasing wariness among Canadians to cross the border, as mentioned in a report by Forbes. Majority Reconsidering Travel to the U.S. Amid Political Strains The poll, conducted between April 11 and 15 among 1,000 Canadian adults, found that over one-third of those surveyed had cancelled past trip plans to the United States. The reasons they gave were political instability, hostile trade policies, and President Trump's recent remark that Canada might be "the 51st state" of the U.S. Only 42 per cent of Canadians, according to the research, believe that the U.S. is friendly to visitors from their nation, and only 38 per cent think America appreciates foreign tourists, as per a report by Forbes. Live Events Consequently, 40 per cent of the respondents indicated they now plan to travel within Canada, while 27 per cent are looking for other international destinations like Mexico and European countries. Slumping Inbound Travel from Canada May Strike U.S. Economy Canada remained the number one source of inbound tourism to the United States in 2024, with 20.4 million tourists generating about USD 20.5 billion for the American economy. Nevertheless, Tourism Economics, an Oxford Economics unit, now forecasts a 20.2 per cent slump in Canadian visitation to the U.S. in 2025—a potentially crippling hit to cross-border tourism-dependent industries. Recent statistics further corroborate the downtrend: Statistics Canada indicated a 32 per cent decline in Canadian road trips to the U.S. during March 2025 compared to the same period the year before, in addition to a 13.5 per cent decrease in air travel. This aligns with larger worldwide trends, with the U.S. also seeing declining visitors from Western Europe (17%), South America (10%) and Asia (a second consecutive monthly decline), reports the U.S. Department of Commerce, as mentioned in a report by Forbes. Travel Industry Voices Alarm Industry leaders are now voicing concern over the economic implications of the so-called U.S. Travel Boycott. Geoff Freeman, President and CEO of the U.S. Travel Association (USTA), highlighted the dangers of negative international headlines related to border security and immigration enforcement. 'We've allowed this negative publicity to run rampant,' Freeman remarked, adding that fears—valid or not—about detentions, deportations, and device searches are discouraging potential tourists. USTA calculates that a 1 per cent decrease in international visitor spending means a USD 1.8 billion reduction in yearly export receipts. With trends ongoing, America may forfeit more than USD 21 billion in related travel exports in the year 2025 alone. FAQs Why are fewer Canadians planning to travel to the U.S. in 2025? A recent poll found that 60% of Canadians are avoiding U.S. travel due to political tensions, concerns over trade policies, and President Trump's controversial rhetoric, including his remark about Canada becoming the '51st state.' Who conducted the study, and when was it done? The study was carried out by Longwoods International between April 11 and 15, surveying 1,000 Canadian adults.
Forbes
29-04-2025
- Forbes
U.S. Travel Boycott: 60% Of Canadians Staying Away Because Of Trump, Survey Says
Six in 10 Canadian adults say they are unlikely to travel to the U.S. this year—and more than a third have already canceled trip plans—due to the political tensions created by President Donald Trump, who has threatened to make Canada the '51st state.' Canadians rally against President Donald Trump's '51st state' rhetoric in Toronto. (Photo by Mert ... More Alper Dervis) 60% of Canadian adults say recent U.S. trade policies and political statements make them less likely to travel south of the border in the next 12 months, according to a Longwoods International study of Canadians released Tuesday (the poll was of 1,000 adults, conducted from April 11 to 15). More than one-third (36%) of those surveyed had planned to travel to the U.S. in the next year but have since canceled those numbers believe the U.S. is 'welcoming of visitors from their country' (42%) and that America 'values international visitors' (38%). 40% of respondents are instead choosing to travel domestically in Canada, while 27% are looking to other international destinations like Mexico and Europe. Canada was the No. 1 source of inbound tourism to the U.S. in 2024, with 20.4 million Canadian visitors spending 20.5 billion dollars at American hotels, restaurants, shops and other businesses. Tourism Economics, a division of Oxford Economics, predicts a 20.2% decline in visits from Canada in 2025. Canadians aren't the only cohort pulling back from travel to the U.S. Foreign inbound travel is trending downward overall, and it's costing the U.S. billions of dollars. The volume of international visitors fell roughly 14% in March 2025 compared to the same period last year, according to preliminary data from the U.S. Department of Commerce, Customs and Border Protection and outside organizations. The number of Canadians taking road trips into the U.S.—representing the majority of Canadians who visit—dropped by 32% in March year over year, according to data from Statistics Canada, which reported a 13.5% decline in U.S-bound air travelers from Canada that month. The U.S. also saw a 17% decline in visitors from Western Europe, a 10% drop from South America and a second consecutive month of declining visits from Asia, according to the U.S. Commerce Department. Every 1% drop in international visitor spending means $1.8 billion lost in export revenue annually, according to calculations from the U.S. Travel Association (USTA). 'If this 14% decline were to hold through 2025, the U.S. stands to lose at least $21 billion in travel-related exports,' according to a recent USTA news release. Whether the damage done by President Trump's tariffs, imperialistic rhetoric and viral headlines of foreigners with legal tourist visas and green cards being detained by U.S. immigration officials can be turned around. 'I think increasingly, whether there's validity to it or not, we have to acknowledge these headlines around the world—of people being detained, of their devices being searched, stories of deportation—it's causing a degree of fear,' Geoff Freeman, CEO of the U.S. Travel Association, told Forbes. 'In the absence of effective communication to explain what CBP is doing, what U.S. policy is, the fact that we want you to come, we've allowed this negative publicity to run rampant.' More than 80% of Canadians surveyed said they believe the U.S. has 'lots of things to see and do' and 57% indicated it's 'a place I'd really enjoy visiting,' according to the Longwoods survey. 'I disagree with the idea that the sky is falling,' Freeman told Forbes. 'I think we're in a challenging position right now. I think that we have a hole to dig out of, but we can dig out of it. We're the United States of America. We've got the [2026] World Cup coming up. We've got America250. We've got the [2028] Olympics coming up. We've got national parks like nobody else in the world, there are reasons to come here.' 140,000. That's how many American jobs were supported by Canadian visitors in 2024, according to the U.S. Travel Association. Canadian Car Travel To U.S. Plunges 32% In March As Boycott Escalates (Forbes) How Trump Is Torpedoing Foreign Tourism To The U.S.—Potentially For Years To Come, Say Analysts (Forbes)
