The U.S. is losing travelers. Here are the countries that stand to benefit

The United States is projected to lose approximately $30 billion in international tourism revenue this year, with foreign visitor spending expected to drop to $169 billion from an initial forecast of $200.8 billion, primarily due to its political environment and a strong dollar. This decline translates to an estimated 13 million fewer international visitors compared to 2019, while countries like Canada, Latin America, Europe, and the Middle East are experiencing increased inbound travel. Consequently, the U.S. global share of international arrivals, which has fallen from 8.4% in 1996 to 4.9% in 2024, is forecast to decline further to 4.2% in 2025 and is not expected to recover, indicating a significant and persistent shift in global tourism patterns away from the U.S.

Analysis

The U.S. international tourism sector is facing a significant and structural downturn, with a projected revenue loss of approximately $30 billion for the current year. This is based on a revised forecast from the World Travel & Tourism Council, which lowered expected international visitor spending from $200.8 billion to $169 billion, citing a "sharp and widespread" drop in arrivals. The decline is attributed to the U.S. political environment and a strong dollar, resulting in an estimated 13 million fewer international visitors compared to 2019 levels. This is not a cyclical dip but a long-term erosion of market share; the U.S. portion of global international travel is forecast to fall to 4.2% this year, down from 8.4% in 1996, and is not expected to recover within the next decade. This displacement of tourism is directly benefiting other regions, with Canada, Latin America, the Caribbean, Europe, and the Middle East absorbing the diverted travel flow. Specifically, countries like Spain, Saudi Arabia, and Turkey are forecast to see visitor numbers increase by over 14 million each relative to 2019. While this trend is negative for U.S.-centric hospitality and travel assets, global online travel agencies such as Booking Holdings and Expedia Group are observing these emerging "new travel corridors" and are positioned to capture bookings regardless of the destination.

Key Decisions for Investors

• Investors should underweight or reduce exposure to U.S. assets that are heavily reliant on inbound international tourism, such as select hotel REITs, airlines with high international-to-U.S. route concentration, and theme park operators.
• Consider global online travel agencies like Booking Holdings (BKNG) and Expedia (EXPE) as relatively insulated plays, as their geographically diversified platforms can capitalize on shifting travel patterns away from the U.S. and toward beneficiary regions.
• Evaluate opportunities in the hospitality and travel sectors of countries explicitly identified as gaining market share, including Canada (for domestic travel), Mexico, Spain, and Turkey, which are capturing displaced tourism demand.
• Monitor the U.S. dollar and forward-looking political sentiment, as any significant weakening of the currency or positive shift in the political climate could serve as a catalyst to slow or partially reverse the decline in inbound travel.