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June 20, 2025 14 mins

Global tariff wars, multi-country travel bans, detentions and phone-seizures at the border. President Trump’s “America first” policies create a grim picture for one group in particular: international tourists. 

Foreign visitors to the US have been on the rise since the pandemic, with analysts previously expecting 2025 to be a bumper year for tourism. That is, until President Trump’s second term began. This drop in tourism is forecasted to cost the American economy $12.5 billion this year.

On Today’s episode of the Big Take, host David Gura sits down with Bloomberg reporter and Big Take Asia host K. Oanh Ha to look at the state of the tourism industry in the US, and where in the world tourists are going instead.

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Episode Transcript

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Speaker 1 (00:00):
Bloomberg Audio Studios, podcasts, radio news.

Speaker 2 (00:08):
In April, California Governor Gavin Newsom announced a new tourism campaign.
It touted the usual Golden State attractions beaches, vineyards, national parks,
you know the drill, But it was marketing to a
very specific kind of tourists.

Speaker 3 (00:22):
California.

Speaker 2 (00:22):
It's the ultimate playground, two thousand miles from washing It.

Speaker 4 (00:26):
In a world away.

Speaker 2 (00:27):
In mindset, California has a lot of sunshine, he said,
and a whole lot of love for our neighbors up north, Canadians.
California was trying to woo Canadians.

Speaker 4 (00:38):
Truth is California.

Speaker 2 (00:40):
Just would it be California without Canada?

Speaker 4 (00:43):
Thank you Canada.

Speaker 2 (00:46):
They wanted to show Canada some love because well, the
state was getting a cold shoulder from this important tourist group.
This past February, Visit California saw a canary in the
coal mine. Fewer Canadians were flying to the state.

Speaker 5 (01:01):
We saw significant declines in February and March. And March
it was fifteen point five percent alone dipped just from
the Canada market.

Speaker 2 (01:09):
That's anti poppus. She works in media relations at Visit California,
the nonprofit organization that promotes tourism across the state.

Speaker 5 (01:17):
There was a lot of conversation about Canada being the
fifty first state that was maybe not the most helpful
for inspiring Canadians to want to spend their vacation dollars
in the United States.

Speaker 2 (01:30):
Canadians weren't booking trips to California, so basically, when visit
California called, there was.

Speaker 1 (01:36):
Just no happetite for Canadian news outlets to write about
the United States or travel to the United States. California
wants to welcome travelers from around the world. In this instance,
it seemed like Canada maybe needed a little bit of
extra reassurance that they are wanted here.

Speaker 2 (01:55):
California isn't alone in experiencing this downturn, and it's not
just Canadians. The US has seen a decline in international
tourism that's forecasted to cost the economy twelve point five
billion dollars for the year. That will actually widen the
trade deficit because spending by visitors in the US actually
counts as an American export.

Speaker 4 (02:16):
If you're in the travel and tourism industry in the
US right now, it is a grim picture and I'd
be nervous, right.

Speaker 2 (02:22):
Wanha is the host of Big Take Asia. She also
covers the travel and tourism industries at Bloomberg.

Speaker 4 (02:28):
Simply put Trump two point zero and many of the
policies coming from the White House are off putting for
people overseas, and that's showing up in their choice of
where or where.

Speaker 2 (02:38):
Notification America first, tariffs, travel bands, the image of America
as the shining city on the hill has dimmed. I'm
David Gera and this is the Big Take from Bloomberg
News Today. On the show, the dramatic shift in US
tourism during President Trump's second term, which cities and business

(02:59):
sectors are feeling at the hardest, and where travelers are
heading instead. Before the start of President Trump's second term,
twenty twenty five was expected to be a bumper a
year for US tourism, even approaching pre pandemic levels, if
not beating them.

Speaker 4 (03:19):
Tourism isn't going to come back to pre pandemic levels
until twenty twenty nine or even twenty thirty. And for
now the summer isn't looking good either. You've got global
air bookings to the US from May first to July
thirty first, eleven percent lower than a year ago. That's
according to research Outfit Tourism Economics.

Speaker 2 (03:38):
At this stage, is it possible to quantify to put
a number on how big a loss this is for
the US economy, How big a loss it's likely to be.

Speaker 4 (03:46):
It's huge numbers. One estimate by the World Travel and
Tourism Council says that spending by overseas visitors this year
is going to fall seven percent. You know, of the
one hundred and eighty four economies that the Council tracks,
the US is the only one where tourism spending is
expected to fall this year, the only one, the only economy. Yeah,
we're seeing that in the numbers. In May, overseas visitors

(04:08):
to the US fell nearly three percent compared to last year.
That's according to the government's preliminary data. Now, the monthly
visitor numbers also dropped in February and March, and a
three percent drop may seem small, but it's actually a
big deal because it bucks the trend. Foreign visitors to
the US have been on the rise since twenty twenty

(04:28):
one during the COVID pandemic, until this year. President Donald
Trump soon after he took office in late January announced
the tear fours. So you've got tare fours on Mexico,
on Canada, and China, and of course there are also
planned tariffs on the EU and in pretty much all
of the US trading partners.

Speaker 2 (04:47):
Other actions by the administration could affect traveler's interest in
traveling to the US or their ability to visit. In June,
President Trump sent the National Guard to quell ice protests
in Los Angeles. He also went a new travel ban
on twelve countries.

Speaker 3 (05:02):
Today, I am signing a new executive order placing travel
restrictions on countries including Yemen, Somalia, Haiti, Libya, and numerous others.

Speaker 4 (05:14):
And then on top of that, we've got crackdowns at
the borders. You know, there have been viral stories about
backpackers from Canada and Wales who've been detained for weeks
by US Immigration and Customs at the border.

Speaker 2 (05:26):
ICE then arrested the Canadian German tourists says she was
taken into custody by ICE uch.

Speaker 4 (05:32):
Guy and had a green car lagged at the border.
And as a result, we've seen a dozen countries issue
these travel advisories or update their travel advisories warning their citizens.
But if they travel to the US, they risk being detained,
they risk not being allowed in, or they're having their
devices searched and seized.

Speaker 2 (05:51):
Digging into these data a little bit more into more detail,
what are the sectors that are seeing the largest losses?
Is it hospitality, is it ava?

Speaker 4 (06:00):
It's really across the board. I mean, the losses will
hit you know, all of these businesses in the travel
and tourism ecosystem. I mean you've got hotels, to airlines,
to restaurants. You know, there's one estimate that the travel
industry supported more than twenty million jobs last year, so
these are pretty big numbers. I think the industry that's
seeing the most immediate pain that we're hearing about is,
of course the hotels. We're already seeing reports that hotels

(06:23):
along the US Canadian border are seeing a big plunge
in visitors. You've also got Expedia, Airbnb. They've warned that
their upcoming financial results are going to be weaker than
expected because of the softening demand in the US. And
we've also seen airlines, you know, cut back on overseas
flights from places like Heathrow to major US hotspots.

Speaker 2 (06:43):
When you look at specific cities in the country, are
they all suffering across the board or are there some
that have weathered this better than others.

Speaker 4 (06:50):
So it's not looking good for cities and states that
rely on tourism dollars. Of the top twenty American cities
that attracted the most bending by foreign tourists last year,
eighteen are going to see drops this year. That's according
to Tourism Economics forecasts. Now California has like four cities
on that list. Los Angeles and nearby Riverside are expected

(07:14):
to see tourist spending fall by as much as seven percent.
Florida is also going to feel the pain. Tampa is
the hardest hit city on the list. Visitors spending there
is taking a dive to nearly eleven percent this year. Interestingly,
New York City was actually one of the few cities
that is forecast to still see again this year, but

(07:35):
officials there aren't optimistic. New York City in May cut
its foreign visitors forecast by seventeen percent, and they cited
Trump's tariffs and the detention of immigrants. So across the US,
the largest cities that attract foreign tourists and overseas spending.
Nearly all of them are down on both measures.

Speaker 2 (07:55):
As you were reporting this out, how much worry? How
much concern is there in these cities in the US
broadly about this trend and this trend continuing.

Speaker 4 (08:04):
I think there's a lot of concern. I mean, what's
interesting is that it's not just leisure travelers who were
seeing pooled back. It's also business travelers as well. We
saw the Global Business Travelers Association. They had originally forecast
I think that business travel was going to climb to
a record one point sixty three trillion this year, but

(08:24):
now with all that's going on, the group says that
they're expecting a drop of five percent.

Speaker 2 (08:30):
After the break. If people aren't traveling to the US,
where are they going and who is still coming to
the States? I want to see if we can marry
the data that we've been talking about with what you've
seen on the ground, as you've been reporting, as you've

(08:50):
been traveling, what are people telling you about their appetite
for travel.

Speaker 4 (08:55):
Asia is definitely benefiting from a more welcoming stance to tourists.
I'm here in Bangkok for a visit this week. You
see a lot of long haul travelers. We saw air bookings,
for example, from Germany, from France, from the UK, Italy,
those air bookings to the US are down for the
summer and instead it looks like, you know, visitors from

(09:16):
those countries are now headed to Japan, They're headed to China,
they're headed to India. Japan is a big, you know,
hotspot and a big standout winner. The chip yn obviously
is attracting a lot of tourism. The country said that
it saw nearly four million four arrivals in April. That
was the most in any single month ever. China's relaxed
it's visa requirements. Most travelers are enjoying visa free entry

(09:39):
to Singapore, to places like Thailand, to Malaysia, even the Philippines.
China as well, and domestic tourism is booming. Intra travel
within Asia has become super popular as well. So instead
of going to the US, for example, you'll have you know,
Singaporean's or Hong Kong friends or taiwan friends say they're
going to Japan, or they're going to Vietnam or Indonesia,

(10:00):
really exploring what's in their backyard. So these governments are
seeing tourism as really key to their economic rebalancing and growth,
and they're rolling out the welcome mat to tourism. Everyone
is really wanting to welcome foreign tourists except for the US.

Speaker 2 (10:17):
We have a colleague who moved to Tokyo and before
she left, she told me, you got to visit. The
end is so weak it's well worth doing at this
point in time. How much of a motivator is currency?
Is a week currency relative to the dollar a motivating
factor for people who are looking to travel.

Speaker 4 (10:33):
Yeah, it's huge. People are being lured to Japan and
I myself have gone to three times.

Speaker 2 (10:39):
And three times.

Speaker 4 (10:42):
Well because of the cheaper end. My dollars go much
further in Japan, So that's definitely been a plus. And
a lot of visitors, especially ones from around Asia, are
coming to Japan because of the end's weakness and because
they can afford Japan. Now, when it comes to the US,
strong dollar had been a deterrent for international visitors. The

(11:03):
dollars weekend recently, and the question remains whether that will
be a strong enough incentive for foreign visitors to come
despite other misgivings. The dollar is a factor, but it's
not the only factor. When people plan vacations.

Speaker 2 (11:20):
So when we're seeing all of these declines, who is
still coming to the US as we've seen this this
downturn and travel.

Speaker 4 (11:26):
That's a good question because among the biggest markets to
the USMA, we did still see big gains in travelers
from Argentina, from Italy, from Taiwan, and we also saw
gains from visitors from Russia for the third consecutive month.
What was also interesting with the main numbers is that
we saw the number of people entering on tourism visas

(11:47):
drop overall, but visitors coming in non business visas actually
showed a game from last year.

Speaker 2 (11:53):
Can we read into that anything about this political moment
in the US.

Speaker 4 (11:57):
Well, certainly between Russia and the US. Right, I think
Russians may feel like they're perhaps more welcomed in the
US than other tours from other countries at this point.
So I think a lot of it, You're right, does
hinge on where we are politically at this very moment.

Speaker 2 (12:14):
We've been talking about international travelers and their attitude towards
the US. Have you been able to glean anything just
about how Americans are feeling about travel at this point
in time?

Speaker 4 (12:24):
So Americans are traveling but economic concerns are definitely factoring
into the trip planning too across the board. When you
look at these polls and surveys, you are seeing that
Americans are making some hard choices when it comes to vacations.
In one survey that I saw, almost seventy percent said
they made at least one adjustment to their holiday plans
because of economic concerns, and I think fourteen percent said

(12:47):
they were foregoing more expensive overseas trips and instead vacationing
within the US. We did see the Japan numbers that
actually Americans in April made up like the fourth biggest
group of travelers to Japan, So everybody loves the chips.

Speaker 2 (13:03):
Wonder before I let you go, bearing in mind you
said you've been to Japan three times. Really, here, I'm
curious about your travel plans and if any of the
trends that we've been talking about have led you to
reevaluate or to change the plans for trips that you've
got lined up.

Speaker 4 (13:18):
Well, I love Japan, but it's nice to avoid the crowds.
And I'm planning a trip as we speak, hiking trips
through Kazakhstan. Never been to any of the sans countries
to Central Asia, lots of lakes to swim in and
lots of hills to climb, so I'm really looking forward
to planning that one.

Speaker 2 (13:36):
I'd usually say thank you, but this time I'm going
to say have a great trip.

Speaker 4 (13:40):
Thanks David. I'll send you a postcard.

Speaker 2 (13:45):
This is the Big Take from Bloomberg News. I'm David Gerat.
To get more from The Big Take and unlimited access
to all of Bloomberg dot com, subscribe today at Bloomberg
dot com slash podcast offer. If you like this episode,
make sure to follow and review The Big Take wherever
you listen to podcasts. It helps people find the show.
Thanks for listening. We'll be back next week.
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