Situated on the Washington coast, Anacortes usually thrives with tourists throughout the summer. However, local entrepreneurs like Kaia Matheny are preparing for a slowdown in visitors and its consequent economic impact this year, fueled by trade tensions and immigration policy concerns that are causing international travelers to rethink their plans to visit the U.S.
Matheny, who co-owns Adrift Restaurant—a farm-to-table establishment adorned with nautical themes in Anacortes—notes a marked decrease in sales due to the drop in Canadian patrons. Historically, Canada has been the largest source of international tourists to the U.S., and recent data indicates a decline of 14% in air arrivals and 32% in land crossings from Canadians in March compared to the previous year, as reported by Tourism Economics.
This downward trend in foreign tourist traffic is expected to continue into the summer months, traditionally the peak season starting in June. Matheny expressed her apprehension regarding the potential implications of this decline. “Tourism won’t be what it is usually,” she stated, noting that preparations are being made to navigate the challenging circumstances.
A ‘quickly souring’ travel outlook
Tourism serves as a crucial export for the U.S., with international visitors contributing over $180 billion to the economy in 2024—outpacing all agricultural exports, according to Geoff Freeman, president and CEO of the U.S. Travel Association.
Unfortunately, a report by Oxford Economics reveals that international visits to the U.S. plummeted by 12% year-over-year in March. This decline is not limited to Canadian visitors; data indicates significant drops in arrivals from Western Europe, Asia, and South America as well.
The prediction of continued weakness in travel is substantiated by data showing that air bookings for international trips to the U.S. are lagging by about 10% compared to last year, as per Tourism Economics. Worst affected are bookings from Canada and Mexico, which have seen declines exceeding 30%.
Ryan Sweet, chief U.S. economist at Oxford Economics, noted, “Foreign visitations to the U.S. are the largest services export in the country and the outlook is quickly souring.” The ongoing decline in international tourism is projected to cost the U.S. economy approximately $10 billion this year, with estimates rising to $21 billion in 2025 if current trends persist.
Freeman acknowledged the gravity of the situation, stating that many businesses and destinations heavily depend on international visitors.
The decline in tourism appears to stem primarily from U.S.-specific challenges rather than a global downturn, according to Lorraine Sileo, senior analyst and founder of Phocuswright Research. Other regions are experiencing growth in tourism, but U.S. domestic tourism does not seem poised to fill the gap, as the market was already showing signs of deceleration heading into 2025.
Sileo pointed out that the “revenge travel” trend, which saw many Americans travel due to pent-up demand after COVID-19, has largely been exhausted, predicting a tough year ahead for the U.S. travel sector.
Travelers have ‘a great deal of fear’
Experts attribute the decline in international visitors to a variety of factors, including trade tensions exacerbated by former President Donald Trump’s tariffs, which have heightened fears of a global trade conflict. The tariffs have raised average import duties to their highest levels since the early 1900s, creating an inherently combative stance with the international community.
In early April, the Chinese government issued a travel risk alert for its citizens considering trips to the U.S., citing worsening economic relations and internal security concerns. Additionally, several European nations have recently released travel advisories for the U.S. due to increased border security and concerns regarding travel documentation.
Trump’s controversial comments about potentially making Canada the 51st state have not gone unnoticed, provoking backlash from both Canadian citizens and lawmakers alike. In response, Canada’s former Prime Minister Justin Trudeau suggested that Canadians consider exploring their own country instead.
Search data shows a dramatic 50% drop in searches by Canadians for trips to the U.S. in March and April compared to the previous year, indicating a significant shift in travel preferences.
Julie Brinkman, the CEO of Beyond, highlighted a notable decline in interest among Canadians for U.S. travel following the announcement of tariffs. She indicated that while U.S. interest waned, interest in Mexico rose by 35%, suggesting that tourists are simply seeking alternative destinations rather than canceling their trips altogether.
Social media comments further echo this sentiment, with users sharing their decisions to cancel U.S.-based vacations in favor of trips to Europe and Canada.
Another factor contributing to the decline is growing anxiety regarding U.S. immigration policy. Freeman noted that whether justified or not, there is a prevailing perception that legal travelers face increased risks of detention, device searches, and deportation, fostering significant fear among potential visitors.
Business profits fall ‘sharply’ amid lost customers
The repercussions of the travel decline are already evident nationwide, with small and mid-sized business profits experiencing a sharp downturn, according to Aaron Terrazas, an economist at Gusto, a payroll and benefits firm. The rate of profitable tourism-related businesses fell to 32% in April 2025, down from 41% just a year prior. Likewise, the profitability of accommodation businesses has dropped to 36% from higher figures in previous years.
This decline in profitability is primarily attributed to stagnant customer traffic rather than rising costs, Terrazas explained. The unexpected drop in revenue is puzzling for a time of year that normally sees increased travel activity, particularly as international travel dynamics become clearer.
As the slowdown continues, the potential for businesses to make difficult decisions, including staffing cuts, increases, Terrazas cautioned.
Foreign visitations to the US are the largest services export in the country and the outlook is quickly souring.Ryan Sweetchief U.S. economist at Oxford Economics
This financial shortfall comes at a time when international travel to the U.S. has not yet returned to pre-pandemic levels. In 2024, the U.S. welcomed 72 million international visitors, falling short of the nearly 78 million who arrived in 2019.
Although non-residents account for less than 10% of the overall U.S. tourism demand, they are notably more lucrative spenders. On average, an international visitor spends over $4,000 during their trip, which is significantly higher than the $1,200 spent by the average Canadian or Mexican tourist.
‘It’s a community impact’
The reduction in foreign visitors is expected to disproportionately affect specific regions, particularly those heavily reliant on tourism such as Las Vegas, Los Angeles, Miami, New York, Orlando, and San Francisco. While New York boasts a diverse economy that can likely withstand tourism-related losses, other areas like Las Vegas and Honolulu may not fare as well.
Sweet emphasized the sensitivity of these economies to fluctuations in tourism, as this sector serves as their primary economic driver.
So far, Matheny, the co-owner of Adrift Restaurant, has reported a 4% decrease in monthly sales from last year—not catastrophic, but noticeable. She remarked that this has compelled the restaurant to adjust its purchasing practices, subsequently impacting local suppliers from whom they source food, thus creating a broader community effect.
“It’s a community impact,” Matheny stated, encapsulating the interconnected nature of local economies that depend on tourism.
