• The U.S. economy will lose billions in revenue from a decline in foreign tourism and international boycotts, largely due to fewer foreign tourists.
• Geopolitical tensions, border detentions, and tariffs are discouraging foreign tourists to visit.
• States like Oregon are adjusting their strategies to attract more domestic tourists during the decline in foreign tourists.

The U.S. economy is set to lose billions in revenue this year. A drop in foreign tourism and boycotts of American products are to blame. Goldman Sachs estimates that these factors could cost the U.S. economy about 0.3% of its GDP in 2025. This could amount to $90 million in lost revenue. The impact is expected to be significant for businesses that rely on foreign tourists and their spending.

Drop in Foreign Visitors to the U.S.

The number of foreign tourists visiting the U.S. has dropped sharply. Data from the International Trade Administration (ITA) shows a nearly 10% decrease in air travel by non-citizens in March compared to the previous year. This decline follows the pandemic restrictions that had initially sparked a rebound in international travel. As more people travel less, the U.S. sees a sharp decline in foreign visitors. This hurts businesses that depend on tourism for profits.

Travel Concerns Due to Global Tensions

Global tensions and hostility at U.S. borders have made potential visitors rethink their travel plans. For example, Curtis Allen, a Canadian videographer, canceled his trip to the U.S. after President Trump imposed tariffs on Canada. Allen also mentioned that he would spend his money on vacation somewhere else instead. As more people reconsider their trips, the U.S. loses out on foreign spending. The ITA’s data revealed that in 2024, international travelers spent $254 billion in the U.S. However, the forecast for 2025 shows a decline. The number of visitors is expected to drop to 77 million. This marks a change in the usual flow of foreign tourists to the country.

Detention and Travel Restrictions Raise Red Flags

U.S. border detentions have further increased concerns for travelers. News of detentions at airports hit the headlines, especially affecting visitors from countries like France and Germany. Canadians, who are the biggest group of foreign tourists, have also become hesitant. These developments add to the uncertainty and contribute to the decline in travel. Bloomberg Intelligence estimates that $20 billion in retail spending from international tourists could be lost this year. A report from the Bureau of Labor Statistics confirms this trend. It showed a sharp drop in airfares, hotel rates, and car rental costs in March, suggesting fewer foreign tourists are spending money in the U.S.

Hotel Industry Faces Challenges

The hotel industry, particularly in the Northeast, is feeling the effects of this drop in tourism. Hotel rates have fallen by almost 11% in this region, which usually attracts many foreign tourists. The decline could be linked to fewer Canadians traveling to the U.S. due to the current political climate. Many travelers are choosing not to visit, and this is starting to show in key sectors like the hotel industry. These drops in prices are an early indicator of the long-term effects on the economy.

Canadian Tourism Remains Resilient

Despite challenges in the U.S., Canada is holding strong. In Niagara Falls, Patrick Keyes, the sales and marketing manager for Rainbow Air Helicopter Tours, spoke about their new $25 million investment. They’ve upgraded their fleet and added a virtual reality attraction. Keyes mentioned that it’s too soon to predict the impact of these changes but is staying optimistic. A report from OAG Aviation Worldwide also highlights a 70% drop in Canadian flight reservations to the U.S. for travel through September. This is a sharp contrast to previous years. Meanwhile, U.S. summer bookings have also dropped by 25% among European tourists, especially at Accor SA hotels. CEO Sebastian Bazin suggests that these declines are due to the negative attention surrounding U.S. border detentions. Tourists are choosing other destinations instead of the U.S. because of the rising concerns.

U.S. Tariffs and Global Perception

Goldman Sachs economists Joseph Briggs and Megan Peters pointed out that U.S. tariffs and its aggressive policies toward long-time allies have damaged the country’s global image. These actions have hurt international relations and led to a decline in foreign tourists. The economists believe these tensions will slow U.S. GDP growth in 2025. The tariffs will likely cause the country to perform worse than previously expected. With fewer foreign tourists coming in, U.S. businesses and industries will feel the effects.

States Adjust Strategies to Attract Tourists

In light of the growing challenges, some states are adjusting their strategies. Travel Oregon, led by CEO Todd Davidson, is still actively working to attract foreign tourists. Davidson and his team have traveled to an adventure tourism conference in Vancouver to pitch Oregon as a destination. However, they are also considering focusing more on domestic tourists. They plan to host sales and marketing partners from countries like the UK, India, and Brazil in the coming weeks. Oregon is not giving up on international markets, but it might need to adapt its strategy as the situation develops.