The US tourism industry has held up despite the dire forecasts following President Donald Trump’s tariff announcements.
Analysts and experts warned that the launch of Donald Trump’s trade war in April would lead to a sharp drop in international visitors to major tourist destinations in the US.
Canada, long the top international visitors to the US, launched a campaign to deliberately boycott summer vacations across the border after Trump slapped the country with steep tariffs and threatened to annex it into the ’51st state’.
While visits from America’s northern neighbors and the rest of the world have dropped, the impact on the US tourism industry has been muted.
The gap has been filled by wealthier Americans choosing to spend their summer holiday at home, rather than meet a potentially hostile reception in Europe or elsewhere.
Major hotel groups such as Hilton and Hyatt lowered their expectations for 2025 following the ‘liberation day’ announcements, but have now lifted their outlooks again.
‘Obviously coming out of «liberation day» and other things, there’s been a decent amount of noise in the system, but we are very optimistic,’ Hilton CEO Christopher Nassetta told investors on the company’s most recent earnings call.
‘There are legitimate reasons to feel really, really good about demand.’
Wealthier Americans are choosing to spend their summer holiday at home
Travel agency Expedia said it has seen an uptick in travel demand in the US since the beginning of July.
The company expects bookings to be up between 3 and 5 percent compared to 2024.
United Airlines, which initially slashed flights as it saw a pullback in demand for travel to and within the US in March and April, has now seen bookings stabilize.
The demand is coming from Americans purchasing domestic flights as well as international journeys, which is balancing out the continued dip from foreign citizens flying to the US.
The number of foreign travelers arriving at US airports is down 3.8 percent in the first seven months of the year compared to the same period last year, according to data from the US National Travel and Tourism Office.
Florida, for example, has been hit hard by the drop in Canadian visitors as many people — known as ‘snowbirds’ — once headed to the state for a reprieve from the harsh winters of the Great White North.
However, disillusionment with their southern neighbors has even led some Canadians to sell their dream US vacation homes.
Yet these international declines have been ‘easily offset by a stronger domestic market — and the domestic market is strong,’ Paul Charles, chief executive of travel consultancy PC Agency, told the Financial Times.
Driving that strong domestic market are the wealthiest Americans who continue to have a strong demand for luxury travel and are more insulated against rising prices and a declining jobs market.
‘You’ve still got very strong balance sheets among households at the upper end, which is where the travel industry makes its real money,’ Adam Sacks, president of research firm Tourism Economics, told the FT.
Florida has been hit hard by the drop in Canadian visitors
Campsites across the US are seeing their fastest growth since the pandemic
Yet at the other end of the scale, ultra-budget vacation providers are also seeing an uptick as middle class Americans become more price conscious while still wanting to enjoy a break.
Campsites across the US are seeing their fastest growth since the pandemic, according to Bank of America.
The desire for an all-inclusive package to control spending has also seen demand for cruises ramp up too.
The world’s largest cruise operators, Royal Caribbean and Carnival, have raised their outlooks for the rest of the year.
