Aussie Tourism Surges as US Travel Drops

Australian travellers are rethinking trips to the US, swapping traditional American destinations for more welcoming or cost-effective alternatives, with Australia itself benefiting from the shift. Concerns over strict border controls and rising US costs are pushing tourists to look elsewhere, a trend that’s hurting major travel businesses but boosting local tourism momentum.

A growing number of Australians have paused or cancelled US holidays, wary of tightening border policies and visa scrutiny under the Trump administration. Heightened deterrents, ranging from invasive social media checks to fears of device searches, have added to the unease. Currency also plays a role in early 2025, the Australian dollar slumped to 5 year lows against the US dollar, making the US a pricier proposition.

Travel operators are already feeling the pinch. One leading agency this week downgraded its earnings guidance by as much as $100 million, citing fewer bookings to the US, one of its strongest markets. Another travel company also reported a $30 million downgrade, linking the dip to trade tensions and global uncertainty. As consumers wait out geopolitical shifts, bookings stall - especially to regions where tariffs or entry rules remain unclear.

Interestingly, travellers aren’t cancelling holidays altogether, they’re just choosing different destinations. Canada and Asia are getting more traction, particularly locations like Hong Kong and mainland China, where travellers report smoother entry experiences and modern infrastructure. Meanwhile, provisional US data reveals an 11.6% decline in overseas visitor numbers in March - excluding Mexico compared to bullish forecasts late last year.

All this is proving to be an upside for Australia. After years of slow recovery post-pandemic, the tourism sector is capturing lost ground. Operators say Australia is benefiting from the global shift in travel sentiment. With inbound interest from Europe and outbound Aussie travellers choosing local or regional alternatives, Australia’s tourism economy is resurging. Even as some industry voices downplay long-term risks, admitting the slowdown could reverse with better airfare deals or policy clarity, for now the trend is clear: America’s loss may be Australia’s gain.

Source: Australian Financial Review, ABS, TRA