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A Foolish Take: The U.S. Tourism Slump

By John Maxfield - Oct 16, 2017 at 3:56PM

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Overseas visits to the United States have experienced a sustained downturn.

There is a trend happening that is impacting the American tourism industry: Overseas visits to the United States are in decline. If this continues, it doesn't bode well for companies in the space.

Data on overseas visits is collected by the National Travel and Tourism Office, an office in the Commerce Department. Using this data, I drew up the chart below. It shows the year-over-year change in overseas visits to the United States each month since the beginning of 2000.

Bar chart showing year-over-year change in overseas visits to the United States.

Data source: International Trade Administration, Department of Commerce. Chart by author.

As you can see, there is a pattern in the year-over-year change in overseas visits that mirrors world events.

In the wake of Sept. 11, 2001, tourism fell precipitously. The same happened after the financial crisis, though to a smaller degree. And the same seems to be happening now.

In early 2016, the year-over-year change in overseas visits to the United States began a sustained decline, topping out at an 11% drop in March of this year.

Since April 2016, overseas visits have fallen on a year-over-year basis in 11 out of the next 12 months.

Corroborating this, software company Adobe said earlier this year that online searches by prospective travelers to the United States dropped 6% in the first quarter of the year. Additionally, Oxford Economics, an advisory and analytics company, predicted earlier this year that travel to the United States could fall by as much as 8% in the wake of Trump administration policies like the two travel bans and the laptop ban.

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