Why the US-China trade war will have an impact on tourism

There is not a single day that we do not mention the American President’s trade war against China in particular but  also against Europe. Tourism professionals are concerned in the United States where the tourism sector has been producing a trade surplus until now.

US Travel Association is worried

The tourism industry has grown strongly in a strong economy, but tourism officials are concerned that global trade tensions could reverse the trend. The travel industry in the United States (hotels, restaurants, stores, national and national parks, casinos and many other businesses) collectively generates more revenue from foreign visitors than any other service sector, and generates a trade surplus.

Tourism in the United States remains healthy for the moment

With $2.4 billion in revenues, including those spent by domestic travellers, the sector is nearly five times the size of the US steel industry.

However, it is now difficult to get accurate information from the NTTO (National Trade and Tourism Office). In a press release, NTTO announced that it was « temporarily suspending » the publication of data due to « technical problems « …

We are beginning to see a decrease in foreign tourists

International tourism to the United States is down according to several media reports. This decline is the result of several factors. They include the strength of the U.S. dollar, economic weakness in Latin America and perhaps the disastrous image produced by the U.S. president. There would be a 4% decrease in incoming travel. With fewer and fewer tourists on American soil, the loss of travel expenses amounts to $4.6 billion and 40,000 jobs are reported to have been lost. There should also be fewer Chinese.

Chinese tourists are encouraged to ignore the United States

The White House’s criticism of China as the main source of trade imbalance is widely disseminated by Beijing. The number of Chinese tourists is reported to have decreased by 8% since the start of the trade war. Group travellers are experiencing a more significant decline with an expected 34.4% decrease over the same period over the year.

Chinese tourists spend much more than other tourists. While international tourists in general spend about $4,400 per trip when visiting the United States, Chinese travellers spend nearly $7,000. In 2017, eight million Chinese were reported to have visited the US.

American tourists travel more abroad

The trade balance of American tourism is likely to fall sharply as Americans themselves travel more abroad. France reportedly saw an unexpected increase. The United States, with +19% hotel arrivals, exceeded the 2 million arrival mark for the first time since 2000. It must be acknowledged that the number of flights between the United States and Europe has exploded and air fares have fallen.

We will have to wait a little longer to know the real impact on tourism following this trade war, but the first data are not favourable in the United States.

Serge Fabre