Even before the current government shutdown started disrupting air travel, international travel to the U.S. was already weak. The U.S. Travel Association expects international visits will have fallen by 6% by the end of this year. That’s not great news for hotels, restaurants, or anyone counting on those tourism dollars.
Aran Ryan, director of industry studies at Tourism Economics, recently joined “Marketplace Morning Report” host Sabri Ben-Achour to discuss the state of the travel industry. The following is an edited transcript of their conversation.
Sabri Ben-Achour: The U.S. had made real gains in attracting international tourists since the low days of the pandemic. It went from 20 million travelers in 2020 to over 72 million last year, but now we have this dip. How big is this dip, and why is it happening?
Aran Ryan: I think it’s notable to have a dip like this. That’s the result of what we’re referring to as a mix of rhetoric and policy that’s contributed to negative sentiment effects.
Ben-Achour: Is it because of, like, actual hostility between certain countries and the U.S. or or is it something more?
Ryan: So, I think for Canadians, there’s probably a good mix that are showing national pride and saying, “No, we don’t want to be a 51st state.” I think there’s probably other travelers globally that feel that, you know, their sensibilities have been challenged, and maybe it gives them a little pause and they choose another destination. And then I think there’s concerns about crossing a border, right? It seems unlikely that somebody would have a complication or get detained, but for some people, that’s enough. Why take the risk?
Ben-Achour: U.S. Travel forecasts a 6.3% decrease in inbound international visits for this year. That is millions of people who would have, you know, rented a hotel or a car or eaten in a restaurant. Do we have a sense of what the cost is of this decline?
Ryan: Right. So we just updated our forecast this week, and [we’re] seeing it as the loss of $31 billion of spending by international visitors this year that we think would have happened otherwise. So there’s about 2,400 Hampton by Hilton Hotels in the country. So a loss of $31 billion is equivalent to the annual revenue for all of those hotels for a three-year period.
Ben-Achour: If people are not coming here anymore, where are all of these international travelers going instead?
Ryan: Western Europe. Also the Middle East, we’re seeing growth, and to a degree, emerging Europe.
Ben-Achour: When the U.S. has lost other kinds of market share, for example, like supplying soybeans to China, that’s not likely to come back. The supply chain has been diverted. Is that the same thing with international travelers? Or can they be won back?
Ryan: I think they certainly can be won back. There is flexibility, and in how people view destinations and how they make their choices, and I think if we kind of showed them that we’re continuing to be a welcoming, exciting, expansive destination, then we can win them back.
