Each month the Scattered Clouds blog takes a look at the wonderful world of tourism through a data and evidence-led lens, all in pursuit of transforming tourism sector data into insight of course!

US market, boom of gloom? - April 2025

I have to admit to being an avid follower of current affairs, but I find myself longing for the day when the first bulletin of news that I hear in the morning makes no mention whatsoever of the current US administration. Nevertheless, the endless coverage of the latest pronouncements from the White House did make me realise that over the past five and a half years of writing this monthly blog I’d not covered what is the UK’s most valuable inbound source market, so, time to make amends.

The most recent data available from the beleaguered ONS International Passenger Survey for the volume and value of the inbound market from the USA relates to the year ending June 2024, a twelve-month period in which we welcomed 5.1 million US visitors, each here for an average of 7.7 nights and who spent a whopping £5.9bn thanks to an average spend per visit of £1,163.

For decades the US has been at the top of the pile when it comes to our most sizeable and valuable source markets. Back in 1979 more than 1.7 million American visitors arrived on our shores, spending almost £2.2bn at today’s prices, with, once we adjust for inflation, an average spend per trip remarkably similar to now at £1,205.

I’ve referred to the excellent US International Trade Administration data portal before, and I am keeping everything crossed that it doesn’t get decimated by you-know-who in his mission to make the US government “more efficient”.

Anyway, from this data source we are able to precisely know the number of American citizens who board an aeroplane in the USA that is destined to touch down in the UK. Clearly some of those US citizens might stay airside in the UK and simply transit onto another country, but nonetheless this provides us with a highly contemporary, and methodologically consistent, assessment of trends.

In the year ending February 2025 the tally stood at 5,532,705, representing a 7% uptick on the preceding twelve months and 13% up on where it had been back in calendar year 2019.

Scotland has been one of the main beneficiaries of this growth, bolstered by an expanding network of direct routes, meaning that 27% more Americans stepped off a plane in Scotland that they had boarded back in the USA in the year ending this February compared with 2019. For the upcoming summer JetBlue is adding direct flights from Boston to Edinburgh to its growing network.

The proportion of US adults who own a passport has grown substantially in recent decades and is now estimated at close to half, a figure that remains far below the norm in Europe, with for example it being around 87% of Brits that own a passport.

In comparison with this side of the Atlantic the domestic economy in the US has been performing fairly well in the past few years, but there are now significant uncertainties.

On the positive side of the leger when it comes to the likelihood that Americans will opt to travel long-haul is the promise of tax cuts that will boost the disposable income of consumers, along with the potential for airlines to benefit from subdued oil prices if the “drill baby, drill” rhetoric results in a substantial increase in supply.

Lastly, one scenario that is favourable for outbound travel from the USA is that the economic policies being pursued will keep inflation higher than it otherwise would have been, leading to the Federal Reserve keeping interest rates higher, thereby leading to the dollar being stronger than would otherwise have been the case, and a strong dollar makes foreign travel for Americans more affordable.

However, on the opposite side of the leger is the increased chance of global trade becoming highly disrupted by the US imposing tariffs, and its trading partners responding by doing likewise. It’s well known that economists often disagree, but it is fair to say that most (not all though) believe that when it comes to trade wars there are only ever losers.

If the US is trading less with the rest of the world there will be fewer international business trips to/from the US, which will mean fewer business travellers turning left when they board a plane, thereby denting the revenue of airlines. A downturn in premium travel will lead to one or both of higher fares for leisure travellers, or trimmed route networks that reflect lower demand from a segment that many carriers rely on to make the sums add up.

It is not just decisions made in Washington DC that can impact transatlantic travel demand. The UK government is intervening in ways that make a visit to Britain more expensive for both business and leisure travellers from the USA.

Firstly, we need to consider the bureaucratic and financial burden being imposed courtesy of the introduction of ETAs (Electronic Travel Authorisation), the cost of which will jump by 60% to £16 within a matter of days after their full introduction early this month.

Next, Air Passenger Duty. If someone is flying back to the US from Britain in economy class their ticket price will include £90 of APD, whereas if they are travelling in a premium cabin APD is set at £216. From April 2026 these charges will increase to £102 and £244 respectively.

Savvy Americans can of course opt to reduce the number of nights they spend in Britain and bolt on some time in Ireland, or France, and then fly home from there to eliminate the need to pay this level of APD (it’s £13 for a short-haul flight, rising to £15 a year from now, but with no equivalent charge for those using the Channel Tunnel), or indeed they can choose not to visit Britain at all and opt for some other European destination.

Many of those who will be visiting Britain, or elsewhere in Europe, this summer have probably already made their arrangements, but looking ahead to 2026 there are a number of one-off headwinds to consider. Next year is an important year for the US as it celebrates the 250th anniversary of the signing of the Declaration of Independence, an event that may entice Americans to take their vacations in America rather than travel abroad. Furthermore, the FIFA World Cup will be hosted by the USA along with Canada and Mexico during June and July 2026, with the tournament potentially leading to higher demand for travel to the USA that could result in inflated airfares, which in turn may dissuade some Americans from booking a trip across the Atlantic.

Earlier I mentioned the potential for reduced business travel due to the stance being adopted towards international trade by the US administration, but equally its stance towards nations around the world regardless of whether that nation has historically been an ally or not has ruffled feathers, with, for example, a reported 70% decline in forward bookings for travel to the US from Canada over the upcoming summer season.

It has also been widely reported that sales of a certain brand of electric vehicle have fallen off the proverbial cliff across much of Europe in recent weeks, and airlines may discover that Europeans decide there are lots of places other than the US that they can visit should they be looking for a long-haul holiday destination. Such an outcome would leave airlines needing to fill more of the seats on their planes with Americans than they had been expecting, which in the short-term could lead to favourable pricing strategies for those Americans, but in the longer-term erode the viability of some routes.

Research conducted by the European Travel Commission late last year quizzed potential travellers to Europe from various long-haul source markets about their intentions in 2025 and found that among Americans the intention to visit Europe is lower than in previous years, being on a par with that for 2021 when the spectre of Covid-19 was still very much impacting sentiment.

It is reasonable to say that the past couple of years has delivered something of a boom in inbound tourism to Britain from the US, and the prospect of a dramatic reduction in arrivals in the next few months would appear remote, but looking further into the future challenges would appear to abound. Not only might the global economic fallout from US policies dent travel demand, but the administration’s willingness also to make disparaging comments about the rest of the world may dampen demand for inbound travel to the US and cool the welcome that those overseas feel appropriate to offer American visitors.

It's traditional for aircraft heading across the Atlantic towards Britain to benefit from a tailwind courtesy of the jet stream, but the prospect of encountering headwinds, and a degree of turbulence, in the next few years feels distinctly possible.

For those of you who may have recently migrated away from what was once Twitter, or are considering so doing, please note that I will be ceasing my regular content sharing on that platform at the end of the year as a stiff breeze has pushed Scattered Clouds towards a patch of blue sky… @tourismstats.bsky.social.