Flight Centre Braces for $100 Million Impact Amid Decline in U.S. Tourism

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Flight Centre, among the largest travel companies worldwide, has signaled it might suffer over $100 million in lost earnings this year due to decreasing interest in traveling to the United States.

In an announcement to the Australian Securities Exchange (ASX) this week, the firm highlighted “volatile trading conditions” associated with revisions in US entry regulations.

This marks the first significant alert from an Australian business that travel to the US is becoming a major issue. It comes amidst escalating consumer concerns related to US immigration processes, reports of tourists facing detention, and increasing expenses.

The number of Australians visiting the US declined by 7 percent in March compared to the same period in the previous year — the most significant drop since the COVID-19 outbreak.

Australians aren’t the only ones hesitating.

Newly released US figures for March reflect substantial declines in visitors from crucial regions: Germany (down 28 per cent), Spain (25 per cent), the United Kingdom (18 per cent), and South Korea (15 per cent), among others.

Overall, inbound tourism decreased by 11.6 per cent.

Even Canadian travellers, traditionally the US’ most reliable market, dropped by more than 900,000 or 17 per cent in March, as growing numbers of Canadians opt to boycott US holidays.

What was once a reliable flow of high-spending international travellers is becoming a much quieter stream.

America’s welcome mat is wearing thin

The US, long marketed as the land of opportunity and adventure, is increasingly perceived as unwelcoming. Tighter border scrutiny, aggressive immigration enforcement, and a sharp shift in political tone have made travellers wary.

While the Flight Centre statement used careful language, its chief executive Graham Turner was clear, saying:

Individuals from Europe, the United Kingdom, and Australia are increasingly reluctant to travel to the US, considering the current situation there. We frequently hear that more travelers are reluctant to deal with passport control.

Reports of tourists being detained, shackled and deported at US airports over minor alleged visa issues or misunderstandings have circulated widely.

In some cases, visitors have had their phones and electronic devices searched without clear cause.

For many travellers, that is a risk not worth taking.

Governments have begun to react. Multiple nations, such as New Zealand, Germany, France, Denmark, and Finland, have revised their official travel advisories for the US, advising their citizens to be cautious while visiting.

The message filtering through international media is clear: the US is not as easy, safe or welcoming as it once seemed.

But while diplomatic warnings grow louder, the economic costs of America’s hardening stance are only beginning to register.

Tourism: America’s forgotten export

While President Donald Trump has slapped tariffs on goods imports from most countries, he has ignored the contribution of services trade to the economy. The US actually runs a surplus in services such as education and tourism.

Trump has dismissed the decline in visitors as “not a big deal”.

The trade wars have focused on goods — cars, steel, farm products — but the service sector, which makes up a larger share of the economy, bears the hidden costs.

Tourism is the US’ biggest service export, contributing more than US$2.3 trillion to the economy and one in ten jobs. That’s a bigger contribution than manufacturing jobs, which account for about 8 per cent of total US employment.

As a driver of economic prosperity , tourism isn’t simply about leisure; it sustains local businesses, rural economies and millions of livelihoods.

A double blow to the tourism experience

While the decline in arrivals has been widely reported, the experience for those who still choose to visit is also likely to change.

Tourism relies on global supply chains, from food to hotel amenities to rental car fleets. Trade war tariffs have raised input costs across the board. Hotels, restaurants, airlines and attractions are passing those higher costs onto customers.

Labour shortages are intensifying the problem. Nearly 20 per cent of the US hospitality workforce was born overseas.

Cuts to seasonal work visas and heightened deportation fears have left many businesses struggling to find staff, compounding existing labour shortages.

The burden is heaviest on small- and medium-sized enterprises, which form the bedrock of the US economy and play a central role in accommodation, dining and local tourism experiences.

A quiet but costly erosion

Tourism is not just a big part of the economy; it’s also a soft power, shaping how the world perceives a nation through its culture, values and hospitality.

Every visitor who feels unwelcome, scrutinised or disappointed is not just a lost sale, but a lost connection.

Research group Tourism Economics forecasts the US could lose up to US$10 billion ($15.6 billion) in international travel spending in 2025 if current trends continue.

And while manufacturing job announcements grab headlines, the slow erosion of America’s tourism brand may leave a longer, deeper scar on its culture, its communities and its place in the world.

The Flight Centre downgrade is not an isolated warning. It is a symptom of a broader shift, one that risks turning visitors away for good.

And for thousands of US businesses, workers and communities — and now Australian ones too — the losses may not be so easily shrugged off.

Madalyn Scerri and Anita Manfreda are both senior lecturers in tourism and hospitality at Torrens University Australia

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