The insight: International tourists will spend $12.5 billion less in the US this year, a decline of 7% YoY, according to a report by the World Travel and Tourism Council (WTTC), as concerns over the Trump administration’s policies coupled with the strong dollar cause foreign visitors to steer clear.

• Spending by overseas tourists is expected to fall below $169 billion this year, down from $181 billion in 2024 and more than 20% lower than the $217.4 billion generated in prepandemic 2019.
• That would make the US the sole country in the WTTC’s report—out of 184—projected to see a decline in visitor spending.

Giving the cold shoulder: The White House’s strained relations with its neighbors have had a near-immediate impact on cross-border travel, with serious consequences for local businesses.

• The number of people traveling from Canada to the US plunged 15% YoY in April, according to US Customs and Border Protection data, led by a 26% decline in land crossings.
• Travel intent is also down: Beyond, a short-term rental revenue management platform, noted a 50% YoY decline in searches for US travel from Canadians, CEO Julie Brinkman told CNBC.
• Not only are Canadians less inclined to visit their southern neighbor for vacations, but they’re also no longer using US border towns as click-and-collect points for ecommerce orders or destinations for cheap gas—which is hurting local businesses that rely on their spending to stay afloat.

Steering clear: The rest of the world isn’t much more enthusiastic about venturing to the US, especially amid signals from the Trump administration that overseas visitors may not be entirely welcome. Stories of travelers being detained or turned away at the border, even with valid visas and travel documents, are causing many tourists to think twice about making the trek.

That’s a big problem for the hospitality industry, as well as the many retailers, restaurants, and other businesses hoping to capitalize on foreign tourists’ spending.

• Overseas visitors—excluding Mexicans and Canadians—spend an average of $4,000 per trip, according to the US Travel Association. That’s eight times more than the average domestic tourist.
• Mexican and Canadian tourists are also bigger spenders than Americans, shelling out on average $1,200 per trip.

In previous years, companies could rely on domestic travelers—who accounted for 90% of US tourism spending in 2024—to make up the difference. But falling demand on that front puts the $180 billion travel industry in an even bigger bind.

Our take: International consumers are increasingly souring on the US, which has profound implications for the travel industry as well as the considerable number of American brands that rely on consumers from other markets.

The silver lining, such as it is, is that consumers’ reluctance could melt away should trade tensions subside—or if the US decides to relax its restrictive travel policies.