Foreign visitors are predicted to spend $22 billion less in the United States compared to last year. Estimates indicate a jaw-dropping $8.5 billion decrease in their expenditures. What’s at stake? Economists and industry experts have expressed profound dismay at this reversal. They largely pin the decline on growing pessimism over the economic effects of trade and immigration policy. According to UNWTO, international arrivals are expected to decrease by at least 9% this year. Consequently, many international visitors are opting for other markets.
Consider the flight bookings, which paint a picture that is very black and white. Between May and July, they fell by 11% compared to the year-ago period. Even more troubling, such a drop foretells a bleaker future for U.S. tourism, as would-be visitors look farther afield to find welcoming destinations outside America’s borders.
Geoff Freeman, the president and CEO of the U.S. Travel Association, noted how much perceptions sway travel decisions. He stated, “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.” This increasing anxiety among the public fosters a sense of dread for prospective visitors.
Just last year, Oxford Economics was forecasting a 9% increase in international arrivals and a 16% increase in spending by 2025. Yet now, they’re faced with an even more dire picture. The group has confirmed that the drop in spending is about 5% compared to last year. The resulting drop in visitation has had serious economic consequences for many industries dependent on travel and tourism.
Traveler perceptions are key, said Aran Ryan, director of industry studies at Tourism Economics. He remarked, “Travelers make choices: where and when to travel, when to book, and how long to stay, and importantly, perceptions of the U.S. matter.” These perceptions, however misguided, can drive travel decisions and when compounded can change the economic landscape.
International air bookings point to a potentially huge trend. Each time America’s reservations are challenged, Europe and Canada, in particular, take a step backwards. Air bookings from Europe are more than 10% behind last year. At the same time, reservations from Canadian travelers have dropped a jaw-dropping 33%. These declines are an ominous sign of the storm yet to come for U.S. tourism.
The impacts of this drop are felt far beyond the immediate loss of spending. And the World Travel & Tourism Council just last week projected a $155 billion loss on the U.S. economy. By 2025, it stands to lose $12.5 billion in spending from overseas travelers if these trends persist. This disturbing projection of a future without travel has many calling to act to address the root causes shaping negative perceptions of travel.