Inbound travel to the US to significantly decline in 2025

The report also found that the decline in international inbound travel equates to a ‎projected lost revenue of around US$22 billion for the year.‎

Consequently, total US travel spending, including both domestic and inbound ‎international travel, could potentially be 4.1% lower than baseline expectations – ‎representing a $72 billion reduction in total travel expenditures.‎

The projections, made by Tourism Economics, a subsidiary of Oxford Economics, are ‎based on an “expanded trade war scenario” in which the US continues to implement ‎tariffs on key trading partners, such as Canada, China, and Mexico. This would trigger ‎‎“retaliatory measures that disrupt economic conditions and travel flows”.‎

Tourism Economics noted that “additional uncertainty stems from deteriorating travel ‎sentiment in Europe due to tariff policies and ongoing geopolitical tensions”.‎

The projected decline has three main factors

The three primary channels of impact on travel would be:‎

• Travel sentiment – strained diplomatic relations and an uncertain economic ‎outlook could weaken travel interest from key inbound US markets
• Economic pressures – a slowdown in US economic growth, coupled with ‎recessions in Canada and Mexico should the planned 25% tariffs be ‎implemented, would curb travel demand
• Exchange rate shifts – a stronger dollar, resulting from tariff-related economic ‎effects, would make the US more expensive and less desirable for international ‎travellers.‎

Tourism Economics warned: “As global trade policies remain in flux, industry ‎stakeholders must recognize the critical link between economic policy and travel ‎demand. Our findings warn of high-risk consequences for the US travel sector, with ‎broad economic implications beyond tourism. Industry collaboration will be essential in ‎mitigating negative impacts.”‎

Meanwhile, in February, Canada saw its first decline in international arrivals since ‎‎2021.‎