USTOA Update: How Tariffs Will Impact the Travel Industry

Terry Dale, the president and CEO of the United States Tour Operators Association (USTOA), released a statement this week on the potential impact of the Trump Administration tariffs on the travel industry.

North of the border, the tariffs’ effect on travel to the United States has been covered extensively. Canadian travel industry members have spoken out against the tariffs since February, and a “Buy Canadian” movement has swept across the country, shifting consumer trends for everything from groceries to vacation plans—although Air Canada has said the reports of Canada-U.S. air collapse are overblown.

In a statement issued on April 3, Dale said he asked the USTOA’s Government Affairs firm, Elevate, “What might the potential impact of these tariffs have on our industry?”

The response pointed to the historic nature of the tariffs, and how that complicates one’s ability to make accurate predictions.

“As the new tariffs have raised import taxation levels to historic rates, there is still not a consensus among experts on the effects on global markets, trade, and ultimately, travel and tourism,” said Elevate. “Similar tariff rates have not been implemented for nearly a century, with global trade and commerce having dramatically changed since then.”

Elevate’s Predictions on the Potential Impact of Tariffs on the Travel Industry

Ultimately, Elevate predicts that the tariffs will have both short-term and long-term impacts on the travel industry in the United States.

The near-term impacts will be on foreign travelers’ view of travel to the United States, and the reputation of U.S. and American travelers abroad.

Longer-term impacts include:

• Wider economic potential to affect consumer purchasing power and consumers’ ability to afford discretionary purchases like travel.
• Increased costs for hotels, airlines, and cruise ships.
• Potential increased price of imported beverages and other goods associated with leisure – this affects the bottom line of event venues, nightlife, and restaurants.

Elevate said in a statement, “Our initial predictions of short-term and longer-term impacts can be found below, but please note that we cannot be certain about impacts at this time. We will continuously track updates and downstream impacts as this develops.”

The USTOA will host its 13th Congressional Caucus on June 3 and 4 in Washington, DC. USTOA members will meet with elected officials on Capitol Hill to talk about USTOA’s core issues.