Airlines and hotels are lowering prices as consumer demand for international travel declines, driven by the Trump administration’s perceived hostility to international travel. U.S. border communities are feeling the strain, especially with fewer Canadians crossing into the country.
The Producer Price Index, a U.S. government report that measures changes in prices paid to companies, showed that average payments for airline passenger services declined 2.7 percent in June, while travel accommodation prices—the amount paid by consumers for hotel and motel stays—dropped 4.1 percent.
The drop-off in travel spending more than offset price increases in other segments of the economy. Analysts said the fall in travel and leisure prices could reflect economic uncertainty driving a decline in consumer discretionary spending.
“One should not take solace from the fact that foreign customers are opting not to travel to the United States,” Joe Brusuelas, Chief Economist at RSM US, told CNN. “That decline in demand translates into weaker tourism, which spreads out through the retail complex, leisure and hospitality and restaurants.”
Separately, reporters from PBS News Hour who visited northern Vermont heard reports of business from Canada dropping 30-50 percent during the summer tourism season, with those on both sides of the border attributing the trend to President Trump’s hostile rhetoric towards the U.S.’s northern neighbor and ally.
Statistics Canada reported that cross-border travel by Canadians declined 33 percent in June, following a 38 percent decline in May.
Steve Wright, President and General Manager of the Jay Peak ski resort, personally phoned more than 100 customers in Canada who had not renewed their annual passes at the Vermont resort. “To a household, they referred back to the 51st state narrative [Trump’s repeated threat to annex Canada as a U.S. state] as being emblematic of the reason that they’re not coming,” Wright said.
Travel to the U.S. is about to get more expensive, too. The “big, beautiful bill” touted by President Trump and signed into law by the Republican-led Congress this month includes a $250 fee for tourist, student and work visas.
The U.S. Travel Association condemned the visa fee, with President Geoff Freeman calling it “a self-imposed tariff on one of our nation’s largest exports: international travel spending.”
