America’s tourism industry is staring down one of its worst crises in history. This drop is a result of the tariffs that former President Donald Trump enacted. Official statistics indicate that international visitors fell by 11.6% in March. This represents a steep decline compared to the same month last year. Operators in the $2.6 trillion sector are deeply concerned about this falloff. These advocates are concerned that the continuing tariff war will force the industry into a longer-term “Trump slump.”
Donald Trump’s administration imposed tariffs on over 180 nations, increasing further tension upon international travel. Despite Trump’s decision to hold many of these tariffs in abeyance for a period of up to 90 days pending negotiations, that uncertainty remains. Recent research from Trivago shows bombshell news on German traveler US hotel booking demand – down 90 percent! Conversely, US bookings from Germany are down just a few percent.
Historically, the United Kingdom has benefited from some of the lowest tariffs globally. This is particularly the case after it recently landed a trade deal with the US. Now, even UK and US travelers are increasingly choosing domestic holidays as economic uncertainty grows. Johannes Thomas, CEO of Trivago, commented that “in times of uncertainty, people stay closer to home.” In the case of domestic travel within the UK, demand increased by an incredible 25% compared to the same time last year. All of this increase occurred during the three-month period of July through September.
Germany’s slump makes it worse still. The US is facing double-digit percentage declines in bookings from travelers in those same countries—Japan, Canada, and Mexico—as well. Canada was one of the initial targets of Trump’s tariff agenda. On February 1, it had been hit with a full 25% tariff. Against this backdrop, Trump some two weeks ago threatened to increase tariffs on the European Union. He recently declared victory when he “paused” a proposed 50% sugar tax scheduled to go into effect next month.
Many businesses in the tourism sector are unable to keep up with these changes. What the long-term impacts on travel patterns will be is still anyone’s guess. The decline in international visitation poses challenges for hotels, restaurants, and other related industries that rely heavily on foreign tourists for revenue.