US Tourism and the Negative Externalities from Trade Tensions

We recently created a heatmap of daily and weekly data to gauge how the US economy is fairing in real time, and tourism, including international, is one of the metrics. International visitations noticeably dropped in March, but the timing of the Easter holiday played a role. Our forecast for the global economy to weaken because of tariffs will likely lead our Tourism Economics team to revise their forecast lower for foreign visitations this year, bringing some negative implications for the US economy (Chart 1).

Inbound international travel is captured as an export for the US. Foreign visitations to the US are the largest services export in the country and the outlook is quickly souring. While it will have potential implications for services employment, hotel real estate, and certain cities, the ramifications for US GDP and risks to our baseline forecast are modest, but it is something we will monitor.

Chart 1: A blip of the beginning of a trend?

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