Travel to the United States Declines

Reasons Why and Why it Matters

Photo by Patrick Hendry on Unsplash

In February, Canadian Prime Minister Justin Trudeau publicly called on his fellow Canadians to boycott travel to the United States in the wake of the Trump Tariffs and other economic and social grievances between the two countries. Trudeau stated, "Canadians are hurt. Canadians are angry. We're going to choose not to go on vacation in Florida or Old Orchard Beach or wherever.”

The latter reference sent a chuckle through many parts of Maine (where I live and from where I write), mostly because it just feels so random that a head of state like the Prime Minister of Canada would specifically reference the campy beach town of Old Orchard Beach, Maine, which, beyond its sandy beach is known for its roller coasters, arcades, ice cream stands, and yes, concentration of visiting Québécois in the summer.

The call for a travel boycott was part of Canada's broader response to the U.S. administration's imposition of a 25% tariff on Canadian goods (and, among other grievances, the suggestion that they become the 51st state!). Trudeau emphasized that the boycott was not directed at American citizens, but was a reaction to policies perceived as harmful to Canada. He also encouraged Canadians to support domestic products over American ones and mentioned that expressions of discontent, such as booing the American national anthem at events, were aimed at U.S. policies rather than its people.

Nearly one million Canadians visited Maine last year, contributing significantly to the state's tourism revenue. So the sly smiles and modest joking about Trudeau’s thoughts on OOB did not last long, giving way to concern among local officials, business owners, and those in the tourism industry about the potential economic impact of a decline in Canadian visitors in the months and perhaps years ahead.

Canadians alone, however, are not the only travelers rebuffing the United States, and the implications could be significant for the U.S. economy.

The Data

By any measure, the United States is still a country people want to see. The Grand Canyon. New York City. Route 66. Disney World. The National Parks. Las Vegas. The allure of the American road trip still sells, and the United States has plenty of notable attractions. But lately, fewer people are buying.

International travel to the United States is declining—quietly, steadily, and, depending on where you sit, alarmingly. And, in fact, some of this has absolutely nothing to do with Donald Trump and his economic policies (although more on that later). According to the National Travel and Tourism Office, total international arrivals to the U.S. were 66 million in 2023, still below pre-pandemic levels. In 2019, nearly 80 million international travelers visited the U.S., meaning we're down 17.5% from the high-water mark.

Meanwhile, international travel has rebounded elsewhere. Global tourism surpassed 1.3 billion trips in 2023, per the United Nations, a 34% jump from just one year prior. But the U.S. recovery has lagged. In 2015, the U.S. held a 13.7% share of global inbound travel. As of 2023? Just 11.3%, and slipping. What's happening here?

A Weaker Welcome

For starters, the U.S. visa system is a mess. For many countries, the wait time for a U.S. tourist visa stretches into months, even years. In places like Mexico, India, and Colombia—fast-growing sources of outbound travel—wait times for visitor visas to the United States often exceed 600 days. By contrast, travelers can get a visa to the U.K. or other parts of Europe in under a month.

The strength of the U.S. dollar as compared to some other currencies has been a problem as well, at least from a tourism standpoint. For many would-be travelers, especially from countries with weakening currencies, the cost of visiting the U.S. is simply too high. A strong dollar makes New York hotel rooms, car rentals in California, and tickets to EPCOT Center harder to justify. You might be able to save on a relative basis by going to Portugal or Thailand, for example, instead.

But the decline in travel to the United States has gained oxygen in recent months, with high potential for the trend to worsen in the months ahead.

The Trump Effect

As has become a recent theme in these pages lately, the one overarching variable that touches upon practically everything else right now is the behavior and unpredictability of the American president, Donald J. Trump.

Recent months have seen a sharper downturn in visits to the United States, likely a reaction against Trump’s statements and policies. In March alone, overseas visits to the United States fell 11.6% compared to the same month last year. Carolann Ouellette, Director of the Maine Office of Tourism, expects Canadian visits to be down 25% this year, per the Portland Press Herald.

What's driving this decline? While a small portion may just be attributable to the normal ebbs and flows of the economic cycle, there is also clearly a significant amount of global unease with U.S. policies under President Donald Trump. His administration's aggressive tariff measures have sparked trade tensions and retaliatory actions from countries like Canada and China. These economic concerns, combined with varying levels of anger and unease about immigration enforcement and controversial social policies, have even led numerous countries to update their travel advisories, warning citizens about potential risks when visiting the U.S., particularly around questions on the risks to immigrants and those who identify as transgender.

Per recent polling, 51% of Europeans now see Donald Trump as an enemy, with 63% saying he has made the world less safe. Residents of Europe and other parts of the world obviously can’t vote in U.S. elections, but they can vote with their dollars and their behaviors, and if a low-hanging option is to simply not vacation in the United States, many are certainly showing their displeasure that way.

The Economic Ripples

It may be easy for some here in the United States to shrug these issues off. In fact, I can picture some people (including, yes, friends here in Maine) who might think it would be a good thing to have our roads, beaches, and restaurants less clogged up in the summer with tourist traffic. And who cares what Europeans and Canadians think about U.S. politics, I am sure many are thinking.

But, needless to say, tourism is big business. In 2023, foreign travelers injected $213 billion into the U.S. economy (down from $233 billion in 2019, by the way).

By one measure, travel and tourism support nearly 16 million American jobs, directly and indirectly, and contribute 7.6% to U.S. GDP. A decline in tourism doesn't just hit hotels and airlines; it hits restaurants, local shops, Uber drivers, theater performers, and thousands of communities that depend on a steady flow of out-of-towners.

The especially pressing risk for the U.S. economy at this moment in time is that although the decline in inbound tourism was already starting to look like something more than a blip in the post-COVID world, it is now looking like something entrenched: a true sea change in global preferences and behaviors. That starts to feel less like mere ripples, and more like structural peril.

One silver lining in all of this is that, for the most part, I think Americans are welcoming of international travelers, and not just for the sake of their dollars. Hopefully as the summer tourism season approaches, we can collectively emphasize our shared humanity and shared interest in so many of the wonderful places to visit here in the United States, and that that same attitude and spirit will prevail when Americans themselves travel abroad.

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Ben Sprague lives and works in Bangor, Maine as a Senior V.P./Commercial Lending Officer for Damariscotta-based First National Bank. He previously worked as an investment advisor and graduated from Harvard University in 2006. Ben can be reached at ben.sprague@thefirst.com or bsprague1@gmail.com.