Business
Foreign Travelers Are Rethinking Travel to the U.S.
International tourists detained at U.S. borders. Steep tariffs imposed on trade partners. Threats against longtime allies.
The onslaught of contested policies and language by the Trump administration in recent weeks is causing tourists around the globe to either cancel or reconsider travel to the United States. A growing number of visitors say they feel unwelcome or unsafe and are reluctant to support the economy of a country that some foreign officials say is waging trade wars and destabilizing its allies. A draft of a new travel ban circulating through the administration could restrict citizens from up to 43 countries, including Belarus, Cambodia and St. Lucia, from entering the United States.
“So many Americans are looking to escape the tense and toxic atmosphere at home. Why would anyone want to visit, especially right now with all the arbitrary detentions at immigration?” said Mallory Henderson, 53, a marketing consultant in London who usually visits the United States twice a year, but canceled a trip to visit her brother and niece in Boston this Easter.
“It’s a really hostile and scary time, and quite frankly, there’s plenty of other inviting and pleasant places I can go to meet up with my family,” she said.
Even before the change in administration in January, the U.S. travel industry was struggling to recover from the pandemic, mainly because of the strength of the dollar, which makes it more expensive for foreign travelers to visit, and long visa wait times. Inbound international visitor numbers were not expected to reach 2019 levels until later this year and foreign visitor spending is not projected to fully recover until 2026, according to the U.S. Travel Association.
But those expectations may now be even harder to reach, travel experts say.
The research firm Tourism Economics had originally forecast travel to the United States to grow by 9 percent this year, but in February, it updated its outlook, expecting inbound travel to decline by 5.1 percent and hotel demand to decline by 0.8 percent in 2025 — the equivalent of an $18 billion drop in spending. Much of the decline is the result of a boycott by Canadian travelers. In February, after President Trump announced tariffs on Canada, the number of Canadians driving across the border fell by 24 percent compared with the same period in 2024.
Airlines are responding to the uncertainty. Some, including Delta Air Lines and American Airlines, cut their financial forecasts for the first few months of the year, citing softness in travel spending. Scott Kirby, the chief executive of United Airlines, said the carrier had reduced the frequency of numerous routes to Canada because of a “big drop in Canadian traffic” into the United States.
“The negative sentiment shift is anticipated to be sustained by an evolving mix of Trump administration factors, including geopolitical friction on trade and national security policies, charged rhetoric and adversarial posturing,” said Adam Sacks, the president of Tourism Economics.
“High-visibility border security and immigration policies and enforcement actions are also expected to discourage visits,” he added.
Uncertainty at the U.S. border has led several countries, including Britain, Germany and Canada, to update their travel advisories for the United States, highlighting that a visa waiver does not guarantee entry into the country and that foreign visitors suspected of breaking entry rules could be detained or arrested at the border. The warnings come after a series of detentions at U.S. ports of entry that involved foreign tourists and green card holders. This month, French officials said a French scientist was denied entry because his phone, which was searched on arrival, contained personal opinions about the Trump administration’s policies. U.S. authorities rejected the claim, saying that the refusal was not tied to his “political beliefs.”
‘It Does Not Feel Right’
Travel operators in Europe have not yet reported large waves of cancellations on the scale of Canada, where many residents are boycotting travel to the United States, but a growing number of travelers are rethinking their spring and summer plans. Eric Dresin, the secretary general of the European Travel Agents’ and Tour Operators’ Associations, said “turbulent times” are expected, particularly if more countries are affected by U.S. policy changes.
Arrivals into the United States from Western Europe fell by one percent in February after increasing by 14 percent the same period last year, according to preliminary data from the U.S. National Travel and Tourism Office.
Christoph Bartel, 28, a German citizen who lives in Norway, had planned a trip to Arizona this summer to visit national parks. He canceled his plans last week in response to the Trump administration’s firing of national park employees and reversal of environmental regulations.
“It does not feel right to support the American economy when the president is causing so much sabotage,” Mr. Bartel said. “It is disappointing to abandon a special trip we planned for months, but we will go to Canada or Mexico instead.”
After Canada and Mexico, Britain supplies the largest number of visitors to the United States, with nearly four million last year. Travel agencies are seeing a split among those clients who frequently visit the United States and are not being deterred by the political climate, and those who are looking for alternative destinations in response to the policy changes.
The sheer expense of visiting the United States in the wake of the pandemic also appears to be taking a toll.
“America was always thought of as a really good value,” said Alan Wilson, the managing director of Bon Voyage Travel & Tours, a British company specializing in trips to the United States and Canada. Along with the strength of the dollar, prices of hotels have also been going up, and steep tips are a problem for many visitors.
“The British market absolutely hates the 20 percent tipping culture and how America always has its hand held out for the next gratuity,” he said. “They would rather pay the money up front.”
Mr. Wilson said his company had seen a 5 percent downturn in U.S. bookings this year compared with the same period last year, but he didn’t expect that number to change much by the summer, as most customers are already booked on multi-destination U.S. itineraries that were confirmed a year in advance.
The Crunch Is Hurting
In places like New York, Florida and California, the crunch is being felt by small travel businesses, which were optimistic that 2025 would bring growth. Luke Miller, the owner of the family-run company Real New York Tours, said his business was being decimated after droves of mainly Canadian visitors canceled following Mr. Trump’s announcement on tariffs.
“I just had 20 busloads of seniors cancel their upcoming tours. That’s thousands of dollars of losses for my small business,” Mr. Miller said, adding that he is receiving cancellations as far out as the winter holiday season and has no bookings from Europeans this summer, his second biggest market after Canada. He called the situation “heart-wrenching.”
Major destinations like New York and California are ramping up marketing efforts to reassure international tourists that they are welcome. Visit California, the state’s tourism agency, revised its overall projections for 2025 visitor spending this month to $160 billion from $166 billion, following the slowdown in the growth of international travelers and the devastating wildfires in Los Angeles in January.
“The good news is, thanks to California’s strong brand on the global stage, international visitors continue to show a strong affinity for the Golden State,” Caroline Beteta, the agency’s president, said in a statement.
New York has had similar messaging. Addressing the expense of visiting the city, Julie Coker, the president of New York City Tourism+ Conventions, said it was possible to visit on a budget, and the marketing organization would highlight those opportunities.
“This is an excellent opportunity to highlight the other boroughs and parts of New York City outside of Manhattan that are just as vibrant and have amazing, award-winning culinary, arts and cultural experiences,” she said, adding that New York had faced obstacles before and is confident that it will be able to reach its goal of recovering international spending by 2026 despite the current challenges.
Mr. Miller of Real New York Tours is not convinced. He said that if bookings did not pick up this summer, he would have to consider laying off staff.
“The reality is that we are being hit the hardest and might not survive,” he said.
Christine Chung contributed reporting.
Follow New York Times Travel on Instagram and sign up for our Travel Dispatch newsletter to get expert tips on traveling smarter and inspiration for your next vacation. Dreaming up a future getaway or just armchair traveling? Check out our 52 Places to Go in 2025.
Business
Startup Varda Space Industries snags former Mattel plant in El Segundo
In an expansion of its business of processing pharmaceuticals in Earth’s orbit, Varda Space Industries is renting a large El Segundo plant where toy manufacturer Mattel used to design Hot Wheels and Barbie dolls.
The plant in El Segundo’s aerospace corridor will be an extension of Varda Space Industries’ headquarters in a much smaller building on nearby Aviation Boulevard.
Varda will occupy a 205,443-square-foot industrial and office campus at 2031 E. Mariposa Ave., which will give it additional capacity to manufacture spacecraft at scale, the company said.
Originally built in the 1940s as an aircraft facility, the complex has a history as part of aerospace and defense industries that have long shaped the South Bay and is near a host of major defense and space contractors. It is also close to Los Angeles Air Force Base, headquarters to the Space Systems Command.
Workers test AstroForge’s Odin asteroid probe, which was lost in space after launch this year.
(Varda Space Industries)
Varda is one of a new generation of aerospace startups that have flourished in Southern California and the South Bay over the last several years, particularly in El Segundo, often with ties to SpaceX.
Elon Musk’s company, founded in 2002 in El Segundo, has revolutionized the industry with reusable rockets that have radically lowered the cost of lifting payloads into space. Though it has moved its headquarters to Texas, SpaceX retains large-scale operations in Hawthorne.
Varda co-founder and Chief Executive Will Bruey is a former SpaceX avionics engineer, and the company’s spacecraft are launched on SpaceX’s workhorse Falcon 9 rockets from Vandenberg Space Force Base in Santa Barbara County.
Varda makes automated labs that look like cylindrical desktop speakers, which it sends into orbit in capsules and satellite platforms it also builds. There, in microgravity, the miniature labs grow molecular crystals that are purer than those produced in Earth’s gravity for use in pharmaceuticals.
It has contracts with drug companies and also the military, which tests technology at hypersonic speeds as the capsules return to Earth.
Its fifth capsule was launched in November and returned to Earth in late January; its next mission is set in the coming weeks. Varda has more than 10 missions scheduled on Falcon 9s through 2028.
For the last several decades, the Mariposa Avenue property served as the research and development center for Mattel Toys. El Segundo has also long been a center for the toy industry as companies like to set up shop in the shadow of Mattel.
The Mattel facility “has always been an exceptional property with a legacy tied to aerospace innovation, and leasing to Varda Space Industries feels like a natural continuation of that story,” said Michael Woods, a partner at GPI Cos., which owns the property.
“We are proud to support a company that is genuinely pushing the boundaries of what’s possible, and are excited to watch Varda grow and thrive here in El Segundo,” Woods said.
As one of the country’s most active hubs of aerospace and defense innovation, El Segundo has seen its industrial property vacancy fall to 3.4% on demand from space companies, government contractors and technology startups, real estate brokerage CBRE said.
Successful startups often have to leave the neighborhood when they want to expand, real estate broker Bob Haley of CBRE said. The 9-acre Mattel facility was big enough to keep Varda in the city.
Last year, Varda subleased about 55,000 square feet of lab space from alternative protein company Beyond Meat at 888 Douglas St. in El Segundo, which it started moving into in June.
Varda will get the keys to its new building in December and spend four to eight months building production and assembly facilities as it ramps up operations. By the end of next year, it expects to have constructed 10 more spacecraft.
In the future, Varda could consolidate offices there, given its size. Currently, though, the plan is to retain all properties, creating a campus of three buildings within a mile of one another that are served by the company’s transportation services, Chief Operating Officer Jonathan Barr said.
“We already have Varda-branded shuttles running up and down Aviation Boulevard,” he said.
Business
How Iran War Is Threatening Global Oil and Gas Supplies
Ships near the Strait of Hormuz before and after attacks began
Every day, around 80 oil and gas tankers typically pass through the Strait of Hormuz, the narrow waterway off Iran’s southern coast that carries a fifth of the world’s oil and a significant amount of natural gas.
On Monday, just two oil and gas tankers appear to have crossed the strait, according to a New York Times analysis of shipping activity from Kpler, an industry data firm. Since then, one tanker passed through.
“It’s a de facto closure,” said Dan Pickering, chief investment officer of Pickering Energy Partners, a Houston financial services firm. “You’ve got a significant number of vessels on either side of the strait but no one is willing to go through.”
Tankers have been staying away from Hormuz since the U.S.-Israeli attacks on Iran that began on Saturday. A prolonged conflict could ripple broadly across the global economy, threatening the energy supplies of countries halfway around the world and stoking inflation.
International oil prices have climbed 12 percent since the fighting began, trading Tuesday around $81 a barrel, and natural gas prices have surged in Europe and in Asia.
A senior Iranian military official threatened on Monday to “set on fire” any ships traveling through the Strait of Hormuz. Vessels in the region have already come under attack. Several oil and gas facilities have also been struck or affected by nearby shelling, though the damage did not initially appear to be catastrophic.
Where ships and energy facilities have been damaged
A fire broke out Tuesday at a major energy hub in Fujairah, United Arab Emirates, from the falling debris of a downed drone, the authorities said. On Monday, Qatar halted production of liquefied natural gas, or fuel that has been cooled so that it can be transported on ships, after attacks on its facilities.
The sharp reduction in tanker traffic is reducing the supply of oil and gas to world markets, pushing up prices for both commodities. And the longer that ships stay away from the Strait of Hormuz, the less oil and gas get out to the world, which could raise prices even more.
Shipping companies have paused their tankers to protect their crew and cargo, and because insurance companies are charging significantly more to cover vessels in the conflict area.
On Tuesday, President Trump said that “if necessary,” the U.S. Navy would begin escorting tankers through the strait. He also said a U.S. government agency would begin offering “political risk insurance” to shipping lines in the area.
In addition to tankers, other large vessels regularly go through the strait, including car carriers and container ships. In normal conditions, nearly 160 make the trip each day.
Some ships in the region turn off the devices that broadcast their positions, while others transmit false locations — making it hard to give a full picture of the traffic in the strait.
The Shiva is a small oil tanker that has repeatedly faked its location, according to TankerTrackers.com, which tracks global oil shipments. It is suspected of carrying sanctioned Iranian oil, according to Kpler. The Shiva was one of the two tankers that crossed the strait on Monday.
The oil and gas that typically move through the strait come from big producing countries like Saudi Arabia, Iraq, Iran and United Arab Emirates, and are exported around the world.
Where tankers moving through the Strait have traveled
In 2024, more than 80 percent of the oil and gas transported through the Strait of Hormuz went to Asia. China, India, Japan and South Korea were the top importers, according to the U.S. Energy Information Administration.
Countries have energy stockpiles that could last them into the coming months, but a continued shutdown of the strait could damage their economies.
Several big disruptions have roiled supply chains in recent years, but the tanker standstill in the Strait of Hormuz could have an outsize impact.
Business
Paramount credit downgraded to ‘junk’ status over debt worries
Paramount Skydance’s jubilation over its come-from-behind victory to claim Warner Bros. Discovery has entered a new phase:
Call it the deal-debt hangover.
Two major ratings agencies have raised concerns about Paramount’s credit because of the enormous debt the David Ellison-led company will have to shoulder — at least $79 billion — once it absorbs the larger Warner Bros. Discovery, bringing CNN, HBO, TBS and Cartoon Network into the Paramount fold.
Fitch Ratings said Monday that it placed Paramount on its “negative” ratings watch, and downgraded its credit to BB+ from BBB-, which puts the company’s credit into “junk” territory. Fitch said it took action due to “uncertainty” surrounding Paramount’s $110-billion deal for Warner Bros. Discovery, which the boards of both companies approved on Friday.
S&P Global Ratings took similar action.
To finance the Warner takeover, Ellison’s billionaire father, Larry Ellison, has agreed to guarantee the $45.7 billion in equity needed. Bank of America, Citibank and Apollo Global have agreed to provide Paramount with more than $54 billion in debt financing.
“Potential credit risks include the prospective debt-funded structure, Fitch’s expectation of materially elevated leverage and limited visibility on post-transaction financial policy and capital structure,” Fitch said.
Late last week, Paramount sent $2.8 billion to Netflix as a “termination fee” to officially end the streaming giant’s pursuit of Warner Bros. That payment paved the way for Warner and Paramount’s board to enter into the new merger agreement.
Paramount hopes the merger will be wrapped up by the end of September. It needs the approval of Warner Bros. Discovery shareholders and regulators, including the European Union.
Paramount executives acknowledged this week the new company would emerge with $79 billion in debt — a considerably higher total than what Warner Bros. Discovery had following its spinoff from AT&T. That 2022 transaction left Warner Bros. Discovery with nearly $55 billion of debt, a burden that led to endless waves of cost-cutting, including thousands of layoffs and dozens of canceled projects.
Warner still has $33.5 billion in debt, a lingering legacy that will be passed on to Paramount.
Paramount plans to restructure about $15 billion in Warner Bros. Discovery’s existing debt.
Paramount CEO David Ellison at a 2024 movie premiere for a Netflix show.
(Evan Agostini / Invision / AP)
Paramount told Wall Street it would find more than $6 billion in cost cuts or “synergies” within three years — a number that has weighed heavily on entertainment industry workers, particularly in Los Angeles.
Hollywood already is reeling from previous mergers in addition to a sharp pullback in film and television production locally as filmmakers chase tax credits offered overseas and in other states, including New York and New Jersey.
Some entertainment executives, including Netflix Co-Chief Executive Ted Sarandos, have speculated that Paramount will need to find more than $10 billion in cost cuts to make the math work. More recently, Sarandos went higher, telling Bloomberg News that Paramount may need $16 billion in cuts.
Cognizant of widespread fears about additional layoffs, Paramount Chief Operating Officer Andrew Gordon took steps this week to try to tamp down such concerns.
Gordon is a former Goldman Sachs banker and a former executive with RedBird Capital Partners, an investor in Paramount and the proposed Warner Bros. deal. He joined Paramount last August as part of the Ellison takeover.
During a conference call Monday with analysts, Gordon said Paramount would look beyond the workforce for cuts because the company wants to maintain its film and TV production levels.
Paramount plans to look for cost savings by consolidating the “technology stacks and cloud providers” for its streaming services, including Paramount+ and HBO Max, Gordon said. The company also would search for reductions in corporate overhead, marketing expenses, procurement, business services and “optimizing the combined real estate footprint.”
It’s unclear whether Paramount would sell the historic Melrose Avenue lot or simply centralize the sprawling operations onto the Warner Bros. and Paramount lots in Burbank and Hollywood.
Workers are scattered throughout the region.
HBO, owned by Warner Bros. Discovery, maintains its West Coast headquarters in Culver City; CBS television stations operate from CBS’ former lot off Radford Avenue in Studio City; and CBS Entertainment and Paramount cable channels executive teams are located in a high-rise off Gower Street and Sunset Boulevard, blocks from the Paramount movie studio lot.
“The combination of PSKY and WBD could create a materially stronger business than either individual entity,” Standard & Poor’s said in its note to investors. “However, this transaction presents unique challenges because it would involve the combination of three companies, with the smallest, Skydance, being the controlling entity.”
David Ellison’s production firm, Skydance Media, was the entity that bought Paramount, creating Paramount Skydance.
Ellison has not announced what the combined company will be called.
Paramount shares closed down more than 6% Tuesday to $12.45.
Warner Bros. Discovery fell 1% to $28.20. Netflix added less than 1% to close at $97.70.
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