Finance
Foreign tourist boycott begins, as businesses brace for impact
Kaia Matheny (left) and Nora Lamphiear (right), co-owners of Adrift Restaurant in Anacortes, Washington.
Kaia Matheny.
Anacortes, a small coastal town in Washington state, typically bustles with tourists during the summer months.
But local business owners like Kaia Matheny are bracing for less foot traffic — and a financial hit — this year as tensions around trade and concerns about immigration policy push foreigners to reconsider the U.S. as a travel destination.
Matheny is the co-owner of Adrift Restaurant, a nautical themed farm-to-table eatery in downtown Anacortes. The town, a gateway to the San Juan islands, is a two-hour drive south of Vancouver.
She’s seen sales fall amid fewer customers from Canada, which is generally the U.S.’ top source of international visitors. Air and land arrivals from Canadians fell 14% and 32%, respectively, in March compared to the same time in 2024, according to Tourism Economics.
A sharp decline in foot traffic among foreign tourists looks set to persist through summer, data shows. Matheny is “wary” about what that will mean during peak season, which typically kicks off in June.
Tourism “won’t be what it is usually,” Matheny said. “We’ll batten down the hatches and make the best of it.”
A ‘quickly souring’ travel outlook
Tourism is a big U.S. export: Foreign visitors spent more than $180 billion here in 2024, more than all agricultural exports combined, said Geoff Freeman, president and CEO of the U.S. Travel Association.
However, international visits to the U.S. fell 12% year-over-year in March, according to Oxford Economics.
It’s not just Canada: Visits from Western Europe, Asia and South America — historically the U.S.’ highest-value travel markets — are also down by double-digit percentages, according to the U.S. Travel Association.
Data suggests the weakness will persist through the summer.
Air bookings for overseas summer travel to the U.S. are pacing about 10% behind the same time last year, according to Tourism Economics, which is affiliated with Oxford Economics. (These were bookings made as of March.)
Canada and Mexico are worse, data show. Summer bookings from Canada to the U.S. are down more than 30%, for example.
“Foreign visitations to the US are the largest services export in the country and the outlook is quickly souring,” Ryan Sweet, chief U.S. economist at Oxford Economics, wrote in a research note published in May.
The loss in international tourism is expected to cost the U.S. economy $10 billion this year compared to 2024, said Adam Sacks, president of Tourism Economics. The U.S. Travel Association pegs the potential loss at an even higher $21 billion in 2025, if current travel trends continue.
“It’s alarming,” Freeman said. Many businesses and destinations “count on the international visitor, in particular.”
The tourism pullback appears to be “more a U.S. issue right now” rather than a broad global weakness in travel, since other regions are seeing positive tourism growth, said Lorraine Sileo, senior analyst and founder of Phocuswright Research, a market research firm.
Domestic tourism isn’t poised to pick up the slack — the market was slowing heading into 2025 and the “revenge travel” trend, which had propelled Americans to travel due to pent-up demand after Covid-19 lockdowns, has largely been played out, she said.
“I don’t think it’s all doom and gloom for the U.S. travel industry,” Sileo said. “But it’ll be a tough year.”
Travelers have ‘a great deal of fear’
U.S. Customs and Border Protection in Newark Liberty International Airport.
Nicolas Economou/NurPhoto via Getty Images
Many factors underpin the decline in international visitors, travel experts said.
For one, President Donald Trump has announced several rounds of tariffs, sparking fears of a global trade war and raising the average import duties to the highest level since the early 1900s.
Trade wars are “intrinsically combative” with the international community, Sacks said.
In early April, China issued a risk alert for tourists heading to the U.S., citing deteriorating economic relations and domestic security. Several European nations also recently issued U.S. travel advisories, citing reasons such as heightened border security and potential issues around travel documents.
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Trump has also drawn the ire of Canadian citizens and lawmakers through repeated suggestions that Canada become the 51st U.S. state, experts said. Likewise for Greenland, which is part of Denmark.
“Now is also the time to choose Canada,” former Prime Minister Justin Trudeau said during a speech in February. “It might mean changing your summer vacation plans to stay here in Canada and explore the many national and provincial parks, historical sites and tourist destinations our great country has to offer,” he added.
Searches conducted in March and April from Canadians for travel to the U.S. dropped 50% from 2024, according to Beyond, a data provider on the global short-term rental market.
“We saw a nearly immediate drop in Canadian search activity after the tariff news broke back in February,” Julie Brinkman, CEO of Beyond, wrote in an e-mail. “While interest in the U.S. dropped, Mexico saw a 35% increase in searches. That tells us travelers aren’t canceling trips — they’re choosing new destinations.”
Anecdotes on social media support that notion.
“Proud to say we’ve cancelled 3 US based cruises over the next 2 years and instead will be vacationing in Europe and Canada,” one Reddit commenter wrote recently.
Growing concern tied to U.S. immigration policy is perhaps the most consequential development in recent months, experts said.
“Whether fair or not, a perception is taking hold that more people are being detained, more devices [are] being searched and legal travelers [are] being deported back to their origin country,” Freeman said. “That creates a great deal of fear.”
Business profits fall ‘sharply’ amid lost customers
Nationally, small and mid-sized business profits have already “deteriorated sharply” amid the travel slowdown, said Aaron Terrazas, an economist at Gusto, a payroll and benefits provider.
The share of “tourism” companies that are profitable fell to 32% in April 2025, down from 41% and 43% in April 2024 and 2023, respectively, according to Gusto. The category includes tour operators, condo or time-share agencies and ticket or reservation agencies.
The share of profitable “accommodation” businesses fell to 36%, down from 44% and 45%, Gusto found. The category includes small hotels and motels, guesthouses, cottages and cabins, and RV parks and campgrounds.
Tourists visit the Charging Bull of Wall Street in lower Manhattan on March 28, 2025, in New York City.
Spencer Platt | Getty Images News | Getty Images
Slower customer traffic — and lost income — are the main culprits, rather than an increase in expenses from inflation or labor costs, Terrazas said.
The erosion in profitability and revenue is “unusually sharp and unusually sudden, particularly for a time of year when we normally start to see travel pick up,” Terrazas said. “There’s no obvious reason why domestic travel would collapse so sharply and so suddenly in a single month, whereas for international travel there are more obvious explanations.”
The longer the slowdown continues, the greater the odds businesses will be forced to make tough choices and potentially cut staff, Terrazas said.
Foreign visitations to the US are the largest services export in the country and the outlook is quickly souring.
Ryan Sweet
chief U.S. economist at Oxford Economics
Financial losses come at a time when the U.S. hasn’t returned to pre-pandemic levels of travel, further pressuring businesses that rely on tourism, Freeman said. The U.S. welcomed 72 million foreign visitors in 2024, shy of the 78 million in 2019, he said.
While non-residents account for less than 10% of all U.S. tourism demand, they are far more “lucrative” spenders, Freeman said.
The average overseas visitor spends more than $4,000 per person per visit, eight times more than the average American tourist spends domestically, Freeman said. The average Canadian and Mexican tourist spends $1,200 per visit.
‘It’s a community impact’
Less foreign travel will have a disproportionate impact on certain areas.
Las Vegas; Los Angeles; Miami; New York; Orlando, Florida; and San Francisco, for example, account for the largest share of foreign tourists, said Sweet of Oxford Economics.
While New York has a large, diverse economy that can likely absorb a tourism loss without going into recession, the same probably isn’t true of places like Las Vegas or Honolulu, he said.
Tourists take photos near the Las Vegas strip.
Robyn Beck | Afp | Getty Images
“These economies are very, very sensitive to tourism,” said Sweet. “This is their main economic driver.”
So far, Matheny, the co-owner of Adrift Restaurant, has seen monthly sales fall 4% relative to last year — not a “huge” decrease, but a “noticeable” one, she said.
The restaurant has had to cut its buying by an equivalent amount, she said. That in turn hurts the local economy in Anacortes, since the restaurant sources the bulk of its food from local farms and fisheries — hurting their bottom lines, too, said Matheny.
“It’s a community impact,” she said.
Jamie Dimon, CEO of JPMorgan Chase, testifies during the Senate Banking, Housing and Urban Affairs Committee hearing titled Annual Oversight of Wall Street Firms, in the Hart Building on Dec. 6, 2023.
Tom Williams | Cq-roll Call, Inc. | Getty Images
The more Jamie Dimon worries, the better his bank seems to do.
As JPMorgan Chase has grown larger, more profitable and increasingly more crucial to the U.S. economy in recent years, its star CEO has grown more vocal about what could go wrong — all while things keep going right for his bank.
In the best of times and in the worst of times, Dimon’s public outlook is grim.
Whether it’s his 2022 forecast for a “hurricane” hitting the U.S. economy, his concerns over the fraying post-WWII world order or his caution about America getting hit by a one-two punch of recession and inflation, Dimon seems to lace every earnings report, TV appearance and investor event with another dire warning.
“His track record of leading the bank is incredible,” said Ben Mackovak, a board member of four banks and investor through his firm Strategic Value Bank Partner. “His track record of making economic-calamity predictions, not as good.”
Over his two decades running JPMorgan, Dimon, 69, has helped build a financial institution unlike any the world has seen.
A sprawling giant in both Main Street banking and Wall Street high finance, Dimon’s bank is, in his own words, an end-game winner when it comes to money. It has more branches, deposits and online users than any peer and is a leading credit card and small business franchise. It has a top market share in both trading and investment banking, and more than $10 trillion moves over its global payment rails daily.
‘Warning shot’
A review of 20 years of Dimon’s annual investor letters and his public statements show a distinct evolution. He became CEO in 2006, and his first decade at the helm of JPMorgan was consumed by the U.S. housing bubble, the 2008 financial crisis and its long aftermath, including the acquisition of two failed rivals, Bear Stearns and Washington Mutual.
By the time he began his second decade leading JPMorgan, however, just as the legal hangover from the mortgage crisis began to fade, Dimon began seeing new storm clouds on the horizon.
“There will be another crisis,” he wrote in his April 2015 CEO letter, musing on potential triggers and pointing out that recent gyrations in U.S. debt were a “warning shot” for markets.
That passage marked the start of more frequent financial warnings from Dimon, including worries of a recession — which didn’t happen until the 2020 pandemic triggered a two-month contraction — as well as concerns around market meltdowns and the ballooning U.S. deficit.
But it also marked a decade in which JPMorgan’s performance began lapping rivals. After leveling out at roughly $20 billion in annual profit for a few years, the sprawling machine that Dimon oversaw began to truly hit its stride.
JPMorgan generated six record annual profits from 2015 to 2024, twice as many as in Dimon’s first decade as CEO. JPMorgan is now the world’s most valuable publicly traded financial firm and is spending $18 billion annually on technology, including artificial intelligence, to stay that way.
While Dimon seems perpetually worried about the economy and rising geopolitical turmoil, the U.S. economy keeps chugging along. That means unemployment and consumer spending has been more resilient than expected, allowing JPMorgan to make record profits.
In 2022, Dimon told a roomful of professional investors to prepare for an economic storm: “Right now, it’s kind of sunny, things are doing fine, everyone thinks the Fed can handle this,” Dimon said, referring to the Federal Reserve managing the post-pandemic economy.
“That hurricane is right out there, down the road, coming our way,” he said.
“This may be the most dangerous time the world has seen in decades,” Dimon said the following year in an earnings release.
But investors who listened to Dimon and made their portfolios more conservative would’ve missed on the best two-year run for the S&P 500 in decades.
‘You look stupid’
“It’s an interesting contradiction, no doubt,” Mackovak said about Dimon’s downbeat remarks and his bank’s performance.
“Part of it could just be the brand-building of Jamie Dimon,” the investor said. “Or having a win-win narrative where if something goes bad, you can say, ‘Oh, I called it,’ and if doesn’t, well your bank’s still chugging along.”
According to the former president of a top five U.S. financial institution, bankers know that it’s wiser to broadcast caution than optimism. Former Citigroup CEO Chuck Prince, for example, is best known for his ill-fated comment in 2007 about the mortgage business that “as long as the music is playing, you’ve got to get up and dance.”
“One learns that there’s a lot more downside to your reputation if you are overly optimistic and things go wrong,” said this former executive, who asked to remain anonymous to discuss Dimon. “It’s damaging to your bank, and you look stupid, whereas the other way around, you just look like you’re being a very cautious, thoughtful banker.”
Banking is ultimately a business of calculated risks, and its CEOs have to be attuned to the downside, to the possibility that they don’t get repaid on their loans, said banking analyst Mike Mayo of Wells Fargo.
“It’s the old cliché that a good banker carries an umbrella when sun is shining; they’re always looking around the corner, always aware of what could go wrong,” Mayo said.
But other longtime Dimon watchers see something else.
Dimon has an “ulterior motive” for his public comments, according to Portales Partners analyst Charles Peabody.
“I think this rhetoric is to keep his management team focused on future risks, whether they happen or not,” Peabody said. “With a high-performing, high-growth franchise, he’s trying to prevent them from becoming complacent, so I think he’s ingrained in their culture a constant war room-type atmosphere.”
Dimon has no shortage of things to worry about, despite the fact that his bank generated a record $58.5 billion in profit last year. Conflicts in Ukraine and Gaza rage on, the U.S. national debt grows and President Donald Trump‘s trade policies continue to jolt adversaries and allies alike.
Graveyard of bank logos
“It’s fair to observe that he’s not omniscient and not everything he says comes true,” said Truist bank analyst Brian Foran. “He comes at it more from a perspective that you need to be prepared for X, as opposed to we’re convinced X is going to happen.”
JPMorgan was better positioned for higher interest rates than most of its peers were in 2023, when rates surged and punished those who held low-yielding long-term bonds, Foran noted.
“For many years, he said ‘Be prepared for the 10 year at 5%, and we all thought he was crazy, because it was like 1% at the time,” Foran said. “Turns out that being prepared was not a bad thing.”
Perhaps the best explanation for Dimon’s dour outlook is that, no matter how big and powerful JPMorgan is, financial companies can be fragile. The history of finance is one of the rise and fall of institutions, sometimes when managers become complacent or greedy.
In fact, the graveyard of bank logos that are no longer used includes three — Bear Stearns, Washington Mutual and First Republic — that have been subsumed by JPMorgan.
During his bank’s investor day meeting this month, Dimon pointed out that, in the past decade, JPMorgan has been one of the only firms to earn annual returns of more than 17%.
“If you go back to the 10 years before that, OK, a lot of people earned over 17%,” Dimon said. “Almost every single one went bankrupt. Hear what I just said?
“Almost every single major financial company in the world almost didn’t make it,” he said. “It’s a rough world out there.”
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