Caroline Smith, an accounting director from Verona, New Jersey, recently traveled to Italy for Easter break with her husband and two children. While visiting the iconic Spanish Steps in Rome, they unexpectedly crossed paths with another family from their hometown. Smith noted that two additional families from their area were also independently vacationing in Italy at that time.
This encounter highlights a notable shift in the global travel landscape—a surge of American travelers venturing abroad, contrasted by a decline in foreign visitors arriving in the United States.
Data from the International Trade Administration, a branch of the Commerce Department, reveals that foreign arrivals to the United States via air fell nearly 10% in March compared to the previous year, and were down almost 13% from pre-pandemic levels, reaching 4.54 million travelers. In contrast, the number of U.S. citizens traveling internationally rose by 1.6% from March of the previous year, marking a 22% increase from 2019, totaling 6.56 million travelers.
This discrepancy could intensify the existing over $50 billion deficit between U.S. revenue from travel and tourism services and the amount Americans spend overseas. This imbalance raises concerns for the U.S. travel industry, which generates approximately $1 trillion annually. In a forecast on January 9, the U.S. Travel Association projected a greater than 12% increase in international tourism spending in the United States this year.
A combination of factors, including fluctuating trade relations, high-profile detentions involving visitors, and the strong rhetoric from the Trump administration, alongside a robust U.S. dollar and travel warnings, have dampened demand from international travelers.
The White House has not provided a comment on this alarming trend.
JPMorgan analyzed the situation and stated that the decline in foreign travel could reduce the gross domestic product by approximately 0.1% this year. Moreover, the uncertainty surrounding detentions of foreign visitors further exacerbates the issue.
Samuel Engel, a senior vice president at ICF consulting firm, pointed out that there is a growing perception among foreigners that the U.S. is less welcoming. He raised concerns about whether this sentiment is affecting international business travel as well.
“Business stakeholders are hesitant to finalize deals amid uncertainty,” Engel remarked.
United Airlines revealed a 6% drop in bookings from international passengers originating in Europe and a 9% decline from Canada compared to the previous year, while Delta Air Lines reported a similar trend.
Despite the downturn in overseas tourism, strong demand for international trips among American travelers is helping mitigate the impact on certain airlines, like United and Delta, which are reducing domestic flight offerings later this year.
Smith, who has two children aged 7 and 11, shared her experiences traveling through Europe and emphasized her desire to continue exploring with her family as they grow older. “We visited Spain in 2023 and plan to go to Portugal in 2024, partly because of shorter flight times compared to Greece, which is also on our list,” she explained.
Grace Cular Yee, a Virginia-based travel agent, noted that many clients are opting for international travel over domestic trips, particularly for college graduation celebrations. “After missing out on high school graduations during Covid, families now want to mark this milestone in style,” she stated. Yee highlighted that travelers are often inspired by social media and popular television shows, citing a recent high school graduation trip to France planned after a client’s daughter became enamored with “Emily in Paris.”
United Airlines reported stable advanced bookings earlier this month, with a 17% increase in premium cabin sales and a 5% rise in international demand.
Delta’s president, Glen Hauenstein, expressed optimism for continued growth, noting that cash sales for international travel have surpassed last year’s numbers. “Our international sales through the summer are performing strongly,” he stated during an earnings call on April 9.
Current market uncertainties have made many working Americans and retirees uneasy, yet affluent travelers, particularly those flying in premium cabins, are bolstering demand. “As a baby boomer, I’m aware that time is limited for visits to Europe or Australia or Japan,” Hauenstein emphasized. “This demographic of retirees remains wealthier than any other and they are eager to travel.”
While a potential decline in spending from budget travelers and slower growth in corporate travel raises questions about high-end leisure travel, for now, the labor market appears robust.
“Everyone’s life may not be entirely disrupted, but many feel that their lives are on uncertain ground right now,” Engel observed. “People tend to delay decisions when faced with uncertainty.”
Correction: Hauenstein spoke on an April 9 earnings call. An earlier version misstated the date.
