Foreign visitor spending in the United States is projected to decrease by $8.5 billion this year, driven by negative perceptions surrounding trade and immigration policies that are prompting international tourists to seek alternative destinations, according to a recent report by Oxford Economics.
This anticipated decline, equivalent to about a 5% reduction compared to the previous year, is attributed to a decrease in the number of international travelers arriving in the U.S., which are expected to drop by approximately 9%, as detailed by Aran Ryan, director of industry studies at Tourism Economics, in a research note issued last week.
The impact of this downturn could be particularly severe for businesses and regions that depend heavily on foreign tourist spending.
Moreover, additional forecasts indicate that the potential economic repercussions may be even more substantial.
The World Travel & Tourism Council recently suggested that the U.S. economy could suffer a “staggering” loss of $12.5 billion in international visitor spending by 2025, describing it as a significant setback for the overall economy that would affect communities, jobs, and businesses nationwide.
‘Perceptions of the US matter’ for travel
According to Ryan, the “posturing and policy” of the Trump administration, particularly concerning border security and tariffs imposed on long-standing trade partners, have generated “sentiment-headwinds” among potential visitors.
Data from flight bookings show an 11% year-over-year decline from May to July as of April, reflecting a disappointing trend likely driven by tourists choosing other locations. Notably, bookings to Europe and Canada are lagging, with decreases of over 10% and 33%, respectively.
“Travelers make choices about where and when to travel, when to book, and how long to stay, and importantly, perceptions of the U.S. matter,” Ryan emphasized.
The U.S. Travel Association estimates that if these trends persist, the country could face a loss of $21 billion in travel-related revenue by 2025. Each 1% decrease in spending from international visitors corresponds to a $1.8 billion drop in annual revenue for the U.S. economy, according to the trade organization.
Experts have also indicated that a strong U.S. dollar may be a factor discouraging foreign travelers. While the dollar has experienced a slight weakening recently against other major currencies, it remains relatively strong overall, increasing expenses for many international visitors as it requires more of their currency to purchase goods and services in the U.S.
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Concerns about the global economy’s weaker growth prospects have also surfaced, with various analysts linking these apprehensions to trade barriers and uncertainty related to trade policy.
Since taking office, President Trump has implemented or announced tariffs on numerous countries and products, including a recent announcement of a 50% tariff on the European Union, which he later postponed until July 9.
Travel experts have pointed to rising anxieties associated with U.S. immigration policy as possibly the most significant factor influencing traveler sentiment in recent months.
“Whether accurate or not, there is a perception that more individuals are being detained, more devices are being searched, and legal travelers are being deported back to their country of origin,” Geoff Freeman, president and CEO of the U.S. Travel Association, stated in a recent Finance Newso interview. “This generates a considerable amount of fear among potential visitors.”
Leading into 2025, Oxford Economics originally forecasted an approximate 9% growth in international arrivals along with a 16% increase in their spending.
