American Tourism is Getting Wrecked!
Moving from anecdotes to statistics
“Canadian travel to the United States is plummeting as tensions over President Donald Trump's actions appear to fuel a growing boycott of America as a vacation destination.
According to aviation analytics provider OAG, forward bookings from Canada to the U.S. have fallen by more than 70 percent for every month through to the end of September compared to the same period last year. April has seen the steepest drop, with just 296,000 bookings, down 76 percent from 1.3 million.” — Newsweek March 27 2025
Turns out, people don’t like getting hit with tariffs and threats against their sovereignty. Although the Trump administration has thus far only referred to a handful of places as potential new additions to the US republic, many more have been insulted, leading to formal and informal boycotts. Estimates expect this will cost Americans $10-20 billion in economic activity from lost tourism in 2025.
US tourism generates $1.2 trillion dollars annually but only $233B comes from international tourists, so the experts are effectively expecting a 10% decline this year. However when you investigate the drop in visitors, the math simply isn’t math-ing:
I think the impact is going to be much greater than the estimates that have been released, therefore in this week’s article, let’s explore how much international tourism to the US will really decline in 2025 and who stands to benefit from this?
Keep reading if you are interested in finding out.
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How much will boycotts cost the US in lost International Tourism in 2025?
The top five countries account for 63% of total international travel to the US each year: Canada (20 million visitors), Mexico (17 million), the United Kingdom (4.5 million), Germany (1.9 million), and Japan (1.6 million). Combined, they represent 45 million out of 72 million total annual visits. If international tourism generates $233 billion per year, that works out to an average of about $3,250 spent per visitor. For the $10–20 billion decline in tourism I referenced earlier to be accurate, it would imply 3.1–6.2 million fewer visits in 2025, roughly a 4–8.5% decline.
As of March data, Canada has seen a 70% decline in air travel and a 30% decline in car trips to the US. Mexico has experienced 23% fewer flights, while declines from Europe range between 14–30% depending on the country. Naturally, this reflects an initial shock reaction to the newly announced tariffs and the Trump administration’s more heavy-handed foreign policy approach. Outside my own primary research, I can’t claim to be a tourism expert but I would expect peak travel happens during the summer months. Did a quick search and yup! July and August it is.
By then, it’s possible diplomatic relations could stabilize, but the damage may already be done. Last week, I explained why airlines are cutting down on routes and how that impacts where travelers choose to go:
The Golden Age of Travel is Over
A month from now, I’m going to Greece for a few weeks of exploration and leisure. My travel companion needs to return before I do, leaving me alone for a few days. I was debating whether to spend this time in Greece or potentially check out another country I haven’t been to before nearby.
TLDR, if it’s harder to get to more exotic locations, people don’t go so they end up overcrowding places that already get a lot of tourists.
Even if travelers warm to the idea of visiting the US again by summer, if flights have been canceled the opportunity to travel may no longer exist. For the sake of argument, let’s assume many travelers haven’t yet finalized their summer plans yet. If trips from Canada decline by 20-30% for the year, that on its own, would surpass the total lost visits for the year assumptions driving the lost tourism spending cited above.
This chart was made before President Trump took office for his second term
Historically, the single largest annual drop in US tourism over the past 50 years (excluding COVID) occurred after 9/11, when tourism fell by 11%, taking until 2004 to fully recover. For context, tourism dropped 5% in 2009 after the Global Financial Crisis. Through just one-third of 2025, the decline already appears larger than the full-year drop in 2009 and is trending toward matching or surpassing the post-9/11 decline.
Tourism Economics currently projects a 9.4% decline in international arrivals to the US in 2025. However, I believe the actual number could surpass the 11% drop seen after 9/11. A 30% decline in Canadian trips alone could drive an overall 8% drop in total international visits. An additional 3% decline, (2 million fewer trips) from other countries would only require a roughly 10% falloff among the remaining top countries (Mexico, Germany, the UK, and Japan).
My table. Steal it if you like, just give me some credit
I see a more likely scenario to be a 20% decline from Canada, a 15% decline from Mexico, Germany, the UK, and Japan, and a 10% decline from all other countries. That would result in a total loss of roughly 10 million trips, (a 14% decline) leading to $33 billion in lost tourism revenue. Even that might prove optimistic. The key difference between 2025 and 2001, is that after 9/11, while air travel took a big hit, road visits from Canada were less impacted. In 2025, both transportation methods have dropped considerably. Combined with a stronger US dollar (even with the recent pullback) and the heightened economic uncertainty, it's reasonable to expect that people will continue to trim international travel plans this year.
This is why a 14% overall drop is very much in play. Even if it’s less, it usually takes a few years for tourism to fully bounce back, so the total cost will be much more than the $33B decline I’m estimating. We'll have to revisit this when full-year figures are reported in early 2026. One major variable will be the actual spending per traveler. Visitors from Canada and Mexico, for instance, tend to spend less than the $3,250 per trip figure estimated above.
Who Benefits From America's Loss?
If people aren’t travelling to the US, where will they go? The most obvious answer, is they will travel more domestically but that’s not why you are reading this or Subscribe to Serviceable Insights. You are here for the hot takes, so here they are:
Europe is laughing right now. At least those not caught in a major power outage1. When you look at top summer travel destinations, cities like Paris, Madrid, Rome & London always attract a large swath of tourists. If people are avoiding New York, Los Angeles and the US as a whole, you should expect the already popular destinations to get even more crowded than usual. Those that were planning to drive to the US from Canada and Mexico, probably won’t substitute that trip with a transatlantic flight but would be air travelers might. To replace the large number of flights to the US Canadian airlines have already cancelled, Europe has been stepping up to fill the void. All the major Canadian airlines have added new transatlantic routes in recent months, and running more flights to existing routes2. Beyond the usual Toronto & Montreal departures, WestJet has been aggressively adding flights to Europe from Calgary.
Beyond the Canadians, Lisbon, Rome, Barcelona, Dubrovnik are all posting record advance bookings for summer 20253. This seems to validate my hypothesis of the rich getting richer, when it comes to attracting international tourists. Outside of Europe, I would expect those travelling from Asia and Australia, no longer interested in going to the US or Europe, will stay in their region so places like Tokyo, Seoul, Bangkok and Sydney will likely be the main beneficiaries.
Link to original Tweet
Does it matter though?
The world will likely travel less internationally this year but at the end, I’m certain people will find other ways to entertain themselves. Those that want to travel will continue to do so, they’ll just find somewhere else to go. If there was a country well equipped for a major drop in international tourism, it would be the US. Considering most their tourism is domestic and $33B in lost revenue is practically a rounding error in the context of a nation with a GDP above $20 trillion dollars, this won’t be what sinks America.
The larger problem is the fear that this will spread further, and negatively impact America’s image on the world stage. Despite what international haters will say about the US, there is a reason they have been the primary destination for ambitious immigrants, seeking for a better life.
It has been a long time since America has had to sell itself to the world. Its brand had more goodwill than Nike, Coca-Cola or any of their corporations. The concern is that this administration’s actions will create lasting distrust and impair the brand, which is it’s most valuable asset. Fortunately, just as tourists tastes can quickly change, it doesn’t take much for international haters to become loud cheerleaders if they feel the tides have shifted back in America’s favor.
This is not the first time it feels like nobody will ever want to visit the US and their brand is over. Betting against them in those cases would have been a bad call then, and I think it’s a bad (long term) bet now.
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Sending my best to those in Spain & Portugal impacted by the blackouts. Although I assume if you managed to secure a stable internet connection, you wouldn’t be using it to read this.
This is why I am running out of excuses to visit Nick in London
New York is worried too. Most of their tourists are from abroad.
Well. . .The loss of tourism will sink Florida more certainly than the ocean rise which will cause a surge in demand for waders. Ask the small businesses there if they care.