Global Jetsetters Ditch ‘Party in the USA’

If the customs line coming into the US seems extra short lately, it’s not just you. International travelers are expected to spend $12.5 billion less on trips to the US this year, according to the latest World Travel and Tourism Council report. The US is the only country out of the 184 in the report that’s on track to see spending on foreign travel fall. 

The report says travel to the US dipped last year mainly because the dollar was so strong that tourists felt like they could get more bang for their buck elsewhere (shopping spree in Ginza, anyone?). 

But this year’s a different story. Foreign travelers aren’t feeling very “Party in the USA” amid Trump administration policies that include steep tariffs and a crackdown on illegal immigration.

Skipping Montauk for Mallorca

The US is still the world’s biggest market for tourism and travel, but it’s becoming increasingly dependent on Americans vacationing within the states rather than visitors coming from abroad. Last year, more than 90% of the US tourism industry’s dollars were domestically generated. 

That means the US is missing out on the significant spending power of wealthy global jetsetters, who spend an average of $4,000 per trip — eight times more than American travelers. 

At the same time, airlines say domestic travel is weakening as Americans move past their post-pandemic revenge-travel phase (“Hot Girl Summer,” we hardly knew ye):

• American Airlines, Delta, and Southwest have all pulled their full-year earnings guidance after seeing softening spending in the states.
• Delta’s CEO said that safety concerns are also keeping some Americans at home. In February, a Delta plane flipped while landing in a non-fatal crash in Canada and in January, an American Airlines regional jet collided with an Army helicopter in Washington, DC, killing everyone aboard. In the most recent incident contributing to flyers’ anxiety, Newark air traffic controllers briefly lost their radar signal this month for the second time.

Superpremium to The Rescue: While economic uncertainty has made budget tourists rethink their vacations, first-class splurges may still offset any losses from coach. United is upgrading its international business class suites to include caviar service and luxe pajamas, while Delta’s first-class cabin will get Shake Shack and sommeliers. The high seas are seeing increased interest in ultra-primo options, too: Royal Caribbean raised its annual forecast last month after bookings for its higher-end cruise itineraries rose. And while the travel sector creates more attractive, and expensive, options for people to splurge on, summer travel still has time to pick up. Uncertainty could mean travelers are booking trips closer to their departure dates, similar to how they acted during the pandemic.