U.S. Economy

Trump Really Might Be Scaring Away Tourists

Economic data show a decline in spending by foreign visitors to the U.S.

A nice place to visit?

Photographer: Drew Angerer/Getty Images

Will Donald Trump scare tourists away from America? Judging from the latest U.S. spending data, he might already be doing so.

Since Trump’s election in November, businesses that rely on tourism have become increasingly concerned that the president’s “America First” policies -- including bans on travel from selected Muslim-majority countries and extra vetting of visa applicants -- will make the country less attractive as a destination for all kinds of visitors. Some organizations and companies have even reported a decrease in bookings. 

Now, the decline is beginning to appear in national economic statistics. The Bureau of Economic Analysis estimates that during the three months ended in February, spending by foreigners on travel in the U.S. amounted to almost $44 billion, down an annualized, inflation-adjusted 10.2 percent from the three months ended in October, before Trump won the election. The decline, although small compared with what happened after the terrorist attacks of Sept. 11, 2001, was the largest drop during a comparable period since the global recession of 2008 and 2009. Here's a chart (in 2009 dollars):

Foreign Travel Spending in the U.S.

Source: Bureau of Economic Analysis

To be sure, such short-term moves often reverse themselves, and Trump isn’t the only factor that could affect tourism. The U.S. dollar, for example, gained about 2 percent against the currencies of the country’s trading partners between October and February, making travel to the U.S. a bit more expensive. That said, the historical correlation between tourism and the dollar’s exchange rate isn’t very strong. And of course it stands to reason that if the U.S. makes foreigners feel unwelcome, they won’t want to visit and spend money.

The trouble with tourism illustrates the broader contradictions in Trump’s version of “economic nationalism.” Repelling foreigners might benefit U.S. workers by reducing competition for jobs in the short term. Ultimately, though, it might also mean less work.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

    To contact the author of this story:
    Mark Whitehouse at mwhitehouse1@bloomberg.net

    To contact the editor responsible for this story:
    James Greiff at jgreiff@bloomberg.net

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