The US economy is set to lose billions of dollars this year amid a steady decline in foreign tourism and an escalating boycott of American products. Recent policies implemented by the Donald Trump administration and rising geopolitical tensions have also spooked potential visitors.
Data published by the International Trade Administration indicates that international travellers spent a record $254 billion in the US last year. The ITA had also projected in early March that the US would welcome 77 million visitors this year. The number however fell sharply as the Donald Trump-led administration cracked down sharply against migrants, initiated a global trade war and sought to expand the American borders. By the end of March, the number of non-citizens flying into the US had dropped by nearly 10% when compared against the previous year.
According to a Bloomberg Intelligence analysis, the country now stands to lose around $20 billion in retail spending from international tourists. The publication noted that early signs of a pullback were already visible — with airfares, hotel rates and even car rental costs falling in March. Economists affiliated with Goldman Sachs and HSBC Holdings Plc have suggested that lower demand — including from foreign travelers — likely played a role. A worst-case scenario outlined by Goldman Sachs adds that the hit from reduced travel and boycotts could total 0.3% of gross domestic product — amounting to almost $90 billion.
Why are foreign tourists avoiding the USA?
Recent reports have painted a rather unfavourable picture of America — with travellers being detained for weeks, abrupt visa cancellations and more. Several European countries have also updated their travel advisories for the US in recent weeks amid growing concern about its immigration policies after citizens faced extensive problems. Tourists from Germany and the UK were among dozens of people who have been denied entry into the US in recent weeks. Some of these individuals were also detained for several weeks at at US ports of entry despite holding what they believed were the correct travel documents.
The Trump administration has also irked many — including Canadians — through attacks against the economy and sovereignty of other nations. Since being elected to office for a second term, the POTUS had repeatedly insisted that he will annex Canada, Greenland and the Panama Canal. He had also suggested invading Venezuela, annexing Mexico, taking over the Gaza Strip and even influencing the direction of the Catholic Church. These remarks have prompted furious backlash from several quarters — with many initiating a ‘boycott’ of the country and its products.
According to a recent YouGov survey, two thirds of Canadians now consider their neighbour to be ‘unfriendly or an enemy’ while a whopping 61% claim they have started boycotting American companies. Data from Statistics Canada indicates that the number of Canadians taking road trips to the US had fallen for a third consecutive month in March — dropping by 32% when compared against the same period last year. A separate report by OAG Aviation Worldwide added that Canadian flight reservations to the US were now down 70% through September versus the same period last year. The US Travel Association had previously warned in February that even a 10% reduction in Canadian inbound tourism could translate to a $2.1 billion loss in spending. It could also jeopardise 140,000 jobs in the hospitality and related sectors.
The issue is not limited to the North American continent. Preliminary data from the National Travel and Tourism Office outlined a 17% drop in inbound travel from Western Europe during March. Bloomberg also quoted officials with Accor SA hotels to indicate that US summer bookings were also down 25% among European tourists.