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The U.S. tourism industry is grappling with a significant downturn as foreign visitors increasingly boycott the country. As tensions rise over trade, immigration, and territorial disputes, international tourists from key markets like Canada, Europe, and Asia are reconsidering their travel plans. This shift has left businesses that rely on foreign foot traffic facing a financial crunch, even before the peak travel season begins.

International Tourism Takes a Hit: The Numbers Speak

Foreign tourism has long been a significant contributor to the U.S. economy, with international visitors spending more than $180 billion in 2024 alone. However, recent data reveals a worrying trend:

• 12% drop in international visits to the U.S. in March 2025 compared to the previous year (Oxford Economics).
• Air and land arrivals from Canada fell by 14% and 32%, respectively, in March 2025 (Tourism Economics).
• Travel bookings from Europe, Asia, and South America are also down by double digits.

This decline is particularly stark given that overseas tourists typically spend significantly more than domestic travelers. On average, an overseas visitor spends $4,000 per visit, while Canadian and Mexican tourists spend around $1,200. These visitors' absence is likely to have a severe economic impact, especially in tourism-dependent areas.

Real-World Impact: Local Businesses Feel the Squeeze

The economic strain is palpable in places like Anacortes, Washington—a small coastal town typically bustling with summer tourists. Business owners like Kaia Matheny, co-owner of Adrift Restaurant, are already seeing a drop in foot traffic. The restaurant, which prides itself on a nautical-themed farm-to-table experience, has experienced a 4% decline in monthly sales compared to last year.

This reduction in visitors is forcing local businesses to cut back on purchases from nearby farms and fisheries, creating a ripple effect throughout the community. Matheny notes, "It’s not just our restaurant—it’s a community impact."

Economic Outlook: Tough Times Ahead

The U.S. tourism sector is bracing for an even more challenging summer. Data from Tourism Economics indicates that overseas summer travel bookings to the U.S. are down by 10% compared to the previous year. Bookings from Canada are particularly alarming, showing a decline of more than 30%.

According to Geoff Freeman, CEO of the U.S. Travel Association, the potential loss from this tourism downturn could reach $21 billion in 2025 if the current trend continues. Analysts point out that while domestic tourism was once expected to fill some gaps, the post-pandemic "revenge travel" surge has already waned.

What’s Driving the Decline?

Several factors are influencing this dramatic drop in international tourism:

1. Trade and Tariff Tensions:
   • Ongoing trade disputes, especially between the U.S. and China, have raised travel concerns.
   • President Trump’s tariff announcements have increased import duties to the highest levels since the early 20th century.
2. Political Friction:
   • Canadian resentment has grown after comments suggesting Canada become the 51st U.S. state.
   • Greenland, part of Denmark, faced similar propositions, souring relations.
3. Safety and Security Concerns:
   • Several European nations issued travel advisories citing heightened border security and potential document issues.
   • China also released a risk alert for travelers, cautioning against visiting the U.S.

Business Adaptation: How Companies Are Coping

Businesses that typically rely on international visitors are now strategizing to offset the losses. Some are pivoting to attract domestic tourists by offering localized experiences and discounts. Others are diversifying their customer base to include travelers from regions less impacted by geopolitical tensions.

One example is Adrift Restaurant, which has cut purchasing costs to align with decreased revenue. While this measure helps sustain the business, it inadvertently affects the broader local economy.

The Bigger Picture: U.S. Tourism’s Economic Significance

Foreign tourism is more than just foot traffic; it is a critical economic driver. In 2024, the revenue generated from international visitors outpaced the total from agricultural exports. The loss of this income could affect not only businesses but entire regions dependent on tourist dollars.

Cities like New York, Miami, Los Angeles, Orlando, San Francisco, and Las Vegas are especially vulnerable. While cities like New York may weather the downturn due to diversified economies, places like Las Vegas and Honolulu could see more severe economic repercussions.

Expert Opinions: A Long Road to Recovery

Ryan Sweet, Chief U.S. Economist at Oxford Economics, warns that the U.S. tourism outlook is "quickly souring." He points out that the problem appears unique to the U.S., as other regions, particularly Europe and Asia, are seeing positive tourism growth.
Lorraine Sileo, senior analyst at Phocuswright Research, remains cautiously optimistic but acknowledges that this year will be challenging. "It’s not all doom and gloom," she says, "but businesses need to adapt quickly."

A Call for Strategic Change

While the drop in foreign tourism is concerning, businesses can mitigate losses by focusing on attracting domestic travelers and exploring new international markets less affected by current geopolitical issues. Adopting flexible business strategies and diversifying customer bases will be crucial to surviving the tough year ahead.

As international tensions continue, tourism-dependent regions must brace for ongoing challenges while advocating for policies that encourage foreign visitors to return. The resilience of local economies, like that of Anacortes, will depend on how well they adapt to these shifting dynamics.