California Tourism Expected to Fall for the First Time Since the Pandemic

Tourism industry experts expect visits to California to decline for the first time since the pandemic, due in part to economic and political uncertainty.

Visit California, a nonprofit organization that works closely with the state’s Office of Tourism, is forecasting the number of total visitors this year to drop 0.7% from 2024, with a decline of 9.2% for international visitors.

“Due to economic and geopolitical headwinds, California’s travel industry, which has shown reliable and consistent growth over decades, is now projected to contract this year,” Caroline Beteta, the nonprofit’s chief executive officer, said during a press conference on Monday.

The nonprofit’s report, published Monday, points to inflation fueled by higher tariffs and negative sentiments toward the U.S. over the Trump administration’s trade policies and nationalist rhetoric as reasons why international tourism is expected to decline this year. Domestic travel is expected to remain flat.

The sharpest forecasted declines come from Canadian and Mexican tourists, who visit and spend more in California than tourists from other countries.

Last year, 1.8 million Canadian tourists visited the state and spent about $3.72 billion, according to the state. This year, those numbers are expected to fall by almost 20%.

In April, Gov. Gavin Newsom announced the launch of a campaign specifically aimed at encouraging Canadians to visit the Golden State despite the federal administration’s trade policies.

The biggest reason Visit California pointed to for why international travel could slow down this year is spending power. Right now, the Canadian dollar is $0.72 to the U.S. dollar.

“We’ve seen this pattern before, when the exchange rate drops below 75 cents, it crosses a psychological barrier that historically triggers a noticeable decline in U.S.-bound travel,” Beteta said. “It’s easy to say you’re not choosing California when, in reality, many simply can’t afford to travel right now.”

Visitors from Mexico are expected to decline by almost 12%. The nonprofit said that, despite concerns visitors might have over immigration and visas, it has not received reports that visas were denied upon entry in California airports.

“Canada and Mexico are the number one and two markets, respectively, and declines from our neighbors have a profound impact on the overall health of California’s tourism economy,” Beteta said. “Since the start of the year, we’ve seen a clear shift in sentiment abroad, especially in markets that have traditionally been strong for California.”

The state expects to see more visitors from India and Japan this year.

Tourism is a major driver of California’s economy, and the industry has shown signs of a rebounding market in the years since 2020, with an increasing number of tourists each year.

Last year, tourists spent more than $157 billion in California, exceeding what they spent in the state before the pandemic. More than 80% of that spending came from domestic tourists. Tourism also generated more than $12 billion in state and local tax revenue and 1.2 million travel-supported jobs.

While economic and political concerns are expected to drive down international tourism, the story could look different for domestic business travel. In November, the San Francisco Travel Association announced there could be more convention activity in the city this year, with 32 events already booked at the Moscone Center, some of which are recurring every year until 2029.