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Trump's first term was marked by policies and pronouncements that strained international relations, including trade tariffs and a travel ban on selected countries. During this period, travel to the US experienced marginal growth, with an average increase of 1% over three pre-pandemic years and a loss of global market share. The US experienced outright declines in arrivals from China, Mexico, and the Middle East during those years.
In this research brief, we make the case for patience but recognize substantial downside risk to international travel. While the scope of actual policy changes remains uncertain and will likely fall short of campaign promises, experience shows travel markets are susceptible to policy and sentiment. The following outlines our initial post-election views consistent with a "Limited Trump" policy scenario. We will update our outlook as policy plans take shape.
Tariffs, restrictive immigration policies, and nationalist rhetoric all hold the potential to negatively impact inbound travel through direct travel restrictions as well as shifts in sentiment.
The primary impact to the travel sector of immigration policy actions is expected to occur through a tightening of labor markets. Talk of mass deportations is likely overdone; instead, we anticipate a moderate step down in annual net immigration, resulting in fewer available staff.
In terms of the broader economic context for travel, we anticipate a moderate boost to GDP growth in 2026 and 2027 due to expansionary fiscal policy consisting of tax cuts and spending increases, relative to status quo policy assumptions. But we also expect that the negative effects of tariffs and immigration reductions on the labor force will represent a long-term drag.
Trump's first term was marked by policies and pronouncements that strained international relations, including trade tariffs and a travel ban on selected countries. During this period, travel to the US experienced marginal growth, with an average increase of 1% over three pre-pandemic years and a loss of global market share. The US experienced outright declines in arrivals from China, Mexico, and the Middle East during those years.
In this research brief, we make the case for patience but recognize substantial downside risk to international travel. While the scope of actual policy changes remains uncertain and will likely fall short of campaign promises, experience shows travel markets are susceptible to policy and sentiment. The following outlines our initial post-election views consistent with a "Limited Trump" policy scenario. We will update our outlook as policy plans take shape.
Tariffs, restrictive immigration policies, and nationalist rhetoric all hold the potential to negatively impact inbound travel through direct travel restrictions as well as shifts in sentiment.
The primary impact to the travel sector of immigration policy actions is expected to occur through a tightening of labor markets. Talk of mass deportations is likely overdone; instead, we anticipate a moderate step down in annual net immigration, resulting in fewer available staff.
In terms of the broader economic context for travel, we anticipate a moderate boost to GDP growth in 2026 and 2027 due to expansionary fiscal policy consisting of tax cuts and spending increases, relative to status quo policy assumptions. But we also expect that the negative effects of tariffs and immigration reductions on the labor force will represent a long-term drag.
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