European appetite for travel to the United States is waning, according to the continent’s largest travel operator, Tui, as concerns mount over stricter border scrutiny and the potential impact of renewed Trump administration policies. The shift in demand comes as several European nations advise their citizens about potential difficulties when traveling to the US.
Tui CEO Sebastian Ebel reported “significantly lower demand” for travel to the US, a trend that coincides with growing interest in destinations like the Emirates, Asia, and the Caribbean. This marks a notable change, as the Caribbean previously faced capacity constraints limiting its potential for growth. The company’s observations align with broader trends revealed by the European Travel Commission, which found a decline in the proportion of long-haul travelers considering a trip to Europe, and specifically, a decrease in US travelers intending to visit the continent.
The European Travel Commission’s survey, encompassing travelers from Australia, Brazil, Canada, China, Japan, South Korea, and the US, showed that 42% of long-haul travelers are contemplating a European trip this year, down from 45% in the previous year. Within the US, the intention to travel to Europe has fallen from 37% to 34%.
The shift in travel patterns is fueled by increasing reports of difficulties faced by international visitors at US borders. Instances of tourists being detained and interrogated, individuals with valid work permits being held in Immigration and Customs Enforcement (ICE) detention centers, and cases of wrongful deportation have surfaced since Donald Trump initially took office. These incidents have prompted several European countries to issue travel advisories, warning their citizens about potentially stricter border controls and increased scrutiny.
Data from the US National Travel and Tourism Office indicates a 4% decrease in overseas visits to the US from western Europe in December compared to the same month the previous year. This decline follows a similar trend observed last year, when Tui reported a “significant decline” in travel to the US, attributing it to the prevailing “atmosphere” and concerns stemming from border control procedures.
Despite the weakening demand for US holidays, Tui reported its best first quarter in over a decade, with revenue increasing by 1% to €4.9 billion (£4.3 billion) and operating profit rising by 7.5% to €72.9 million. A significant driver of this success was the company’s cruise business, which saw profits increase by over 70%.
According to Aarin Chiekrie, an analyst at Hargreaves Lansdown, Tui’s strong performance is underpinned by rising occupancy rates despite fleet expansion. He noted that all business segments, with the exception of hotels and resorts, demonstrated improved profitability. The hotel and resort segment experienced a double-digit decline due to losses from a hurricane in Jamaica and the non-recurrence of certain one-off benefits from the prior year.
The changing travel landscape also comes as the Biden administration continues to grapple with immigration policy, and as a potential return of Donald Trump to the presidency looms. Trump’s previous policies, characterized by stricter enforcement and increased scrutiny of travelers, are raising concerns about a potential resurgence of the challenges faced by international visitors.
The impact of these developments extends beyond individual travelers and travel operators. A sustained decline in tourism to the US could have broader economic consequences, affecting businesses that rely on tourist spending, such as hotels, restaurants, and retailers. The shift in demand towards alternative destinations, such as the Emirates, Asia, and the Caribbean, could benefit those regions’ tourism industries.
Tui’s shares, listed in Frankfurt, experienced a slight increase of 0.4% in early trading on . The stock has risen by approximately 10% over the past year, reflecting the company’s overall positive performance despite the challenges in the US market.
The situation highlights the sensitivity of the travel industry to geopolitical factors and policy changes. As concerns about border security and immigration policies continue to evolve, travelers and travel operators alike are likely to remain cautious, potentially leading to further shifts in travel patterns and a re-evaluation of destination preferences.
