The outlook for business travel to the United States has been particularly grim. Reports indicate a 9% decline in just April. This extreme drop has been caused by economic uncertainty and frustration with the current administration’s tariffs combined with their border policies. To make matters worse, funding cuts have disproportionately affected individual travelers. The pinch was acutely felt by Kevin Haggarty, who saw a jaw-dropping 75% decline in his business travel to the U.S.
Haggarty’s concerns extend beyond financial constraints. He is deeply disturbed by news of international visitors being turned away or detained at the U.S. border. All this piles on to make him even more disinclined to travel. Leslie Andrews and other industry proponents are definitely on board with this thought. Moreover, they foresee a major drop-off in corporate travel to the U.S. in the second and third quarters of this year.
Summer advance bookings from Europe to 14 key U.S. cities are down by as much as 90 percent. They’re down 12% in the summer months of June, July, and August from last year. Business isn’t interested. The business community is alarmed by this trend. Most of the retailers who were supposed to travel with Haggarty have decided to cancel their trips to the U.S. According to recent data, Mexico saw a staggering 99 percent decrease in air arrivals of business visa holders. This drop of 11.8% continues the recent trend of dwindling international business travel.
“Honestly, my nervousness and reluctance to cross into the U.S. stems from that more than any hostility to the American market.” – Kevin Haggarty
Against these positive trends, the number of travelers using tourist visas decreased by 6%. Through the first quarter of 2023 business travelers coming into the U.S. were on the rise, albeit modestly. Over 1.2 million arrivals were on business visas, an increase of 7% over last year. Of all the world’s regions, the Middle East is the only one where an increase—11 percent—was recorded. In contrast, arrivals increased by 9.4% compared to April 2024.
With this new uncertainty, many business travelers have begun to wonder whether their next trip is really required. Andrews noted a shift in mindset among corporate travelers, stating, “What I am hearing is, ‘Things were good in the first quarter,’ but in the second quarter it’s a matter of, ‘Must you take that trip?’” This indicates that companies are reconsidering travel arrangements and only allowing for the most critical trips.
Haggarty’s recent move to cut short a planned trade show trip to Gatlinburg, Tennessee is a perfect example of this unfortunate trend. He lamented the ease of bringing products from Canada into the U.S., stating, “It’s unfortunate. It’s much easier to bring products to Canada from the U.S., but we’re in a corner.” Business leaders are sounding an all-too-familiar alarm of operational headaches. They have legitimate concerns about the safety climate for international travel.
Brett Sterenson, another industry expert, has reported losing international business as various countries caution their citizens against traveling to the U.S. He noted the importance of these people-to-people exchanges for building goodwill and teaching developing countries about good government.
“These exchanges were monumentally useful in spreading goodwill, but also in educating developing nations on good governance.” – Brett Sterenson
Canadian members of the Business Travel Association of America are worried about their long-term travel outlook. A stunning 71% expect to travel less this year. This ominous prediction highlights a significant international business community’s fear and concern about traveling to the U.S.
As businesses continue to face these dual challenges, here’s hoping they stay nimble and proactive, anticipating changes in real-time. The long-term individual impact of the change in business travel is large on corporate strategies. It turns protectionist and shortens global supply chains, remaking economic relations between countries.
