"US May Lose 28 Trillion Won in Tourism Revenue This Year"... Aftermath of Trump Policies

[Financial News]  


Since the inauguration of Donald Trump's second administration, there have been warnings that the decline in foreign visitors to the US could have a more 'tremendous' impact on the US economy than expected.

This year, it is projected that US travel-related income will range from as low as 8.5 billion dollars to as high as 21 billion dollars.

CNBC reported on the 28th (local time) that research firms and tourism associations are presenting pessimistic forecasts.





Research firm Oxford Economics forecasts that foreign tourist spending will decrease by about 5% compared to last year, with a reduction scale reaching 8.5 billion dollars (about 11 trillion won) this year alone.

If Trump's tariff and immigration policies continue, the decrease could be even greater.

Aaron Ryan, head of Oxford's tourism economics division, expressed pessimism in an analysis report released last week, stating that the number of foreign visitors to the US will decrease by about 9% this year.

This shock from the decrease in foreign visitors is expected to be particularly severe for industries heavily dependent on foreign tourists.

The World Travel and Tourism Council (WTTC) recently warned in a report that the US economy will face a 'shocking' loss of 12.5 billion dollars (about 17 trillion won) due to the decrease in US visitors and their spending this year.

WTTC predicted that this shock from the decrease in tourism revenue will have a direct impact on the entire US economy, affecting communities, jobs, and businesses from the East Coast to the West Coast.

The US Travel Association (USTA) has presented the most pessimistic forecast.

USTA pessimistically predicted that if the current trend continues, US tourism-related revenue will reach 21 billion dollars (about 28 trillion won).





Ryan from Oxford pointed out that the 'attitude and policies' of the Trump administration, combined with the psychological backlash caused by strengthened border security and tariffs on long-standing trading partners, are turning away those who might have visited the US.

He said that as of April, US airline ticket bookings between May and July have decreased by 11% compared to the same period last year, and the future outlook is pessimistic. Ryan explained that tourists who were planning to visit the US are turning their attention elsewhere.

The backlash is particularly strong in Europe and Canada.

According to Ryan, the decrease in US airline ticket bookings is over 33% for Canada and over 10% for Europe.

In Canada, resentment towards the US has surged after President Trump threatened to annex Canada as the 51st state of the US.

Ryan said, "Tourists make various choices," adding, "They decide where and when to travel, when to book, and how long to stay." He continued, "More importantly, it's their perception of the US," warning that if perceptions worsen, it could pose a significant problem for the US.





Experts are concerned that the strong dollar and the global economic slowdown caused by the tariff war initiated by Trump will also impact the US tourism industry.

The US dollar has recently declined in value against major currencies, but it is still soaring compared to previous levels.

For foreign visitors to the US, this is a factor that raises costs.

The shock from the global economic slowdown cannot be ignored.

As Trump has initiated tariff and trade wars, the expectation that the global economy will slow down is dominant.

Trump announced massive reciprocal tariffs on the 2nd of last month and declared a 90-day grace period a week later, but he warned the European Union (EU) of a 50% tariff while pressing for negotiations. If negotiations with the EU do not go smoothly, he stated that a 50% tariff would be imposed starting July 9th.

dympna@fnnews.com Song Kyung-jae Reporter