The U.S. economy is expected to lose billions of dollars in revenue this year from a drawback in foreign tourism and boycotts of American products. Goldman Sachs Group Inc. estimated the hit in 2025 from reduced travel and boycotts could total 0.3% of gross domestic product, totaling around $90 million.
Data from the International Trade Administration showed that the number of non-citizens who had entered the U.S. by plane plummeted almost 10% in March compared to a year earlier. The report also noted that foreign tourism has been a blow for the U.S. recently after the pandemic-era restrictions sparked a resurgence of international travel.
Potential U.S. visitors are now rethinking traveling to the U.S. amid increased hostility at the border, rising geopolitical frictions, and global economic uncertainty. Curtis Allen, a Canadian videographer, canceled an upcoming U.S. vacation after President Trump imposed tariffs on his home country and suggested it should become the 51st U.S. state. Allen said, “We’re not just staying home; we’re going to go spend the same money somewhere else.”
“Given what we know about how much Canadian travel has fallen off, that’s potentially a bit worrying for that region.”
-Omar Sharif, president of Inflation Insights.
According to ITA data, foreign travelers spent approximately $254 billion in the U.S. in 2024. The analytics firm also estimated in early March that the country would receive 77 million visitors in 2025.
The data came out just before news of detentions at U.S. airports made headlines, where travelers from countries like France and Germany were ensnared. Canadians, who contribute the largest number of foreign travelers in the U.S., are choosing to stay put as Trump heightens attacks on the country’s economy and sovereignty.
Bloomberg Intelligence analysis revealed that roughly $20 billion in retail spending from international tourists in the U.S. may be compromised. A monthly Bureau of Labor Statistics report on consumer prices published on April 10 indicated that early signs of a sharp pullback are already showing up as airfares, hotel rates, and car rental costs fell in March.
Sharif also highlighted that the decline in hotel rates was driven by an almost 11% drop in the Northeast in particular, possibly a result of fewer Canadians traveling there.
Canada remains resilient despite challenging U.S. traveling conditions
Patrick Keyes, sales and marketing manager at Rainbow Air Helicopter Tours in Niagara Falls, said that the timing is “very interesting” for the firm, which just invested $25 million in a new building, an enhanced fleet, and a virtual reality attraction ahead of the busy summer season. Keyes also added that “we are waiting to see the fallout.”
A report by OAG Aviation Worldwide also reported that Canadian flight reservations to the U.S. have plummeted by 70% through September versus the same period last year. U.S. summer bookings have also dropped by 25% among European tourists at Accor SA hotels. The firm’s Chief Executive Officer Sebastian Bazin maintained the drop could be attributed to border detentions creating a “bad buzz” and diverting tourists to other destinations.
Goldman Sachs economists Joseph Briggs and Megan Peters mentioned in a March 31 report that U.S. tariff announcements and a more aggressive stance towards historical allies hurt global opinions about the state. The duo also believe that tariffs will lead to U.S. gross domestic product growth to underperform consensus expectations in 2025.
Todd Davidson, CEO of Travel Oregon, Oregon’s tourism commission, said the company was continuing efforts to attract foreign travelers. Davidson noted his team was on a trip to pitch the state at an adventure tourism conference in Vancouver. He also acknowledged that his team will host sales and marketing partners from the UK, India, and Brazil in the coming weeks.
The company’s senior executive maintained that his team was also contemplating whether the commission will need to tweak its strategy more toward domestic visitors as the situation unfolds. He added, “Oregon is not and will not take its eye off those international markets.”
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This articles is written by : Nermeen Nabil Khear Abdelmalak
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