The United States is facing a massive drop in international tourism this year, with Goldman Sachs warning the economy could lose up to $90 billion.
Goldman Sachs says that in the worst-case scenario, losses from decreased tourism and growing boycotts could shave off 0.3% of the U.S. economy, equal to nearly $90 billion.
The decline comes as travelers from countries like Canada and much of Europe rethink their plans amid rising political tensions, harsh border treatment, and boycotts of American goods.
According to the International Trade Administration, arrivals of foreign visitors by air dropped nearly 10% in March compared to a year ago.
Canadian travel, in particular, has taken a big hit. U.S. Customs and Border Protection data show nearly 900,000 fewer Canadians crossed into the U.S. last month than in March 2024, a 17% plunge.
This isn’t just a blip. It’s one of the worst year-over-year travel declines ever recorded outside the COVID-19 crisis.
Frustrated Travelers Take Their Money Elsewhere
Curtis Allen, a Canadian videographer, scrapped his vacation plans to Oregon after President Donald Trump imposed tariffs on Canada and made a comment suggesting it should become the 51st U.S. state.
“We’re not just staying home,” said Allen.
“We’re going to go spend the same money somewhere else.”
Allen also canceled his Netflix subscription and said he’s avoiding U.S. products at the grocery store.
“Now it takes us double the time, because we’re looking at where the products came from,” he said.
Billions at Risk Across the U.S. Economy
Canadians spent over $20 billion in the U.S. last year, supporting around 140,000 jobs, according to the U.S. Travel Association.
But this year, travel bookings from Canada to the U.S. are down 70% through September, and European summer bookings at U.S. hotels are down 25%.
Airfare, hotel rates, and car rentals are also falling—a sign demand is drying up. In March, hotel prices dropped almost 11% in the U.S. Northeast alone.
“Given what we know about how much Canadian travel has fallen off, that’s potentially a bit worrying for that region,” said Omair Sharif, president of Inflation Insights.
States Try to Patch Things Up
Some U.S. leaders are trying to do damage control. California Gov. Gavin Newsom launched an ad campaign to woo Canadians back.
“You know who’s trying to stir things up back in D.C., but don’t let that ruin your beach plans,” he said in a video message.
“Here in California, we’ve got plenty of sunshine and a whole lot of love for our neighbours up north.”
Caroline Beteta, head of Visit California, said Trump’s rhetoric is “devastating” for tourism.
“We want to reach out and extend that hand to Canadians and say, you’re valued, and we’re frustrated too,” she said.
Palm Springs Rolls Out the Welcome Mat
Palm Springs, a major Canadian snowbird destination, is also feeling the impact. “The Trump administration is sending messages that just don’t feel very American,” said Mayor Ron deHarte.
“It’s hurting people and it’s causing harm.”
He’s filled the airport and city streets with “Palm Springs Loves Canada” banners to reassure travelers they’re still welcome.
But with Canadian airlines cutting flights, he warned, “There is a big hole that will be felt if we don’t get this straightened out.”
Oregon Sticks to Its Plan
Despite the turmoil, some states like Oregon are continuing to market themselves abroad.
Todd Davidson, CEO of Travel Oregon, said they’re not giving up on international visitors. “We will be here when our international visitors feel that they are ready to return,” he said.
Still, with global opinions of the U.S. shifting and border experiences turning negative, many potential tourists are putting their money elsewhere, and it’s starting to show in the numbers.