Tiffany & Co.’s Landmark rejuvenated flagship on Fifth Avenue buzzes with energy and admiration, standing out as one of New York’s most popular tourist retail attractions. Visitors from around the world leave not only with a memorable (and Instagrammable) experience but something uniquely personal and precious. Fabiana from Italy is no exception when she posted a recent review on TripAdvisor: “Tiffany & Co. in New York is a timeless icon! I bought only a small souvenir on the fifth floor, but the staff treated me with exceptional elegance and care.”
The post-pandemic travel boom should have been an opportunity for high-end retailers in the U.S. to boost their revenues, but travelers are voting with their feet and wallets. It will take a coordinated approach to win back the trust and confidence of international visitors to choose the U.S. over rival destinations.
Luxury Tourist Dollars
Luxury retailers in the U.S. like Tiffany & Co. rely heavily on international tourist foot traffic. McKinsey & Co. reports that there were 62 million visitors to New York in 2023, including 11 million international visitors. Tourist dollars matter. As Humphrey Ho, President of Helios & Partners notes, “Retail has long relied on international travelers for revenue—after all, leisure time in a new city often includes shopping.”
According to the U.S. Travel Association, overseas visitors spend an average of $4,000 per trip — eight times more than domestic travelers. This spending power extends to high-end purchases, with international tourists willing to pay a premium for luxury products and services. Globally, tourist spending on luxury goods grew by 7 to 9 percent in 2024, according to Bain & Co., accounting for approximately 35 percent of the global personal luxury goods market.
However, retailers are now on notice of another unintended consequence of U.S. trade and travel policies. A potential decline in international tourism to the U.S. could significantly impact retailers, who are already grappling with more cautious consumer spending.
Border Angst
In 2024, the U.S. welcomed 72.4 million international visitors, but the latest data from the U.S. International Trade Administration shows that many international tourists are rerouting their travel plans. The number of overseas visitors to the U.S. dropped by 11.6 percent in March compared to the previous year (this data excludes land arrivals from Canada and Mexico).
Media reports of the tightening of border control measures, which have resulted in the arrest and detention of European visitors continue to make international headlines. Visits from Western Europe fell by 17.2 percent, while arrivals from Germany plunged by a dramatic 28.2 percent in March. Several European governments have since updated their travel advice for the U.S., further reinforcing a sense of angst and anxiety among potential visitors. Should retailers in the U.S. be worried? With nearly two million German visitors in 2024 alone, anyone can do the math.
U.S. Boycott
However, it is Canadians who are the largest inbound group of tourists who have taken the strongest anti-US position following U.S. tariffs and repeated claims of turning the country into a 51st state. Canadian border crossings dropped by a staggering 32 percent in March, with air travel declining by 13 percent. In effect, this points to a growing travel and spending boycott as voiced by former Canadian Prime Minister Justin Trudeau: “Now is the time to choose Canada… It might mean changing your summer vacation plans to stay here in Canada and explore the many national and provincial parks, historical sites, and tourist destinations our great country has to offer.”
It seems that this message is resonating with the broader population. The latest Longwoods International Canadian Travel Sentiment Survey found that 36 percent of Canadians who had planned to travel to the U.S. in the next year have now canceled those plans. And there appears to be no turning back with 60 percent saying that U.S. trade policies and political statements make them less likely to visit the U.S. in the next 12 months.
Experiential Retail
High-end retailers in the U.S. should not, however, take this new scenario as a signal to scale back retail operations, but rather as an opportunity to adapt to changing travel patterns. Ho observes, “Gen Z, in particular, books flights with shorter lead times, favoring spontaneity and flexible itineraries. The market hasn’t disappeared—it’s simply redirected.”
Retailers need to continue investing in innovative retail concepts that surprise and entertain Gen Zers. A prime example is the long lines in front of the recently opened Harry Potter Store on Chicago’s Magnificent Mile. It’s become a bucket-list destination not just for exclusive merchandise, but also for a visit to the Butterbeer Bar.
Moreover, the global affluent elite still want to travel and shop. The luxury leisure hospitality sector is projected to grow significantly. For retailers, now is the time to double down on immersive experiences. A source of inspiration is Breakfast at Tiffany’s at the Blue Box Café by Daniel Boulud, which brings glamour back to luxury retail.
Retail Footprint
However, it won’t be easy for retailers in the U.S. to win back international visitors who are opting for alternative destinations. For example, the slower-than-expected rebound in Chinese outbound travel has seen Chinese tourists favor South Korea and Japan. In 2023, only 386,000 Chinese tourists visited New York, compared to a million from the UK. On top of that, China recently issued a travel risk alert to the U.S.
Retail executives may need to reprioritize their global footprint. With shifting travel patterns, international retailers are likely to redirect investment toward emerging tourist hotspots. According to the 2025 Savills Global Luxury Retail Report, Japan (excluding China) led the Asia-Pacific region in new luxury store openings, partly driven by Chinese tourists. Europe continues to attract high-spending international travelers, creating retail opportunities. In the summer of 2024, there were 124 luxury brand activations, such as pop-up stores, with 74 percent taking place in Europe.
Travel Retail
This new reality could mean that a potential long-term shift in international tourism will require retailers to consider expanding alternative retail formats. According to Ho, travel retail presents a strategic growth opportunity “especially as inbound tourism to the U.S. declines and tariffs and currency pressures discourage full-price purchases from those who do visit.”
Ho believes that retail brands should expand into travel retail, “capturing spend from travelers who may bypass traditional stores but are still eager to shop at ports of entry, where convenience and perceived value are higher.”
He adds, “If foot traffic in the U.S. is softening, the solution is to meet global consumers where they are. That means building a stronger presence in overseas markets like China, where high-value tourists remain active, even if they’re now shopping closer to home, or traveling to other destinations.”
Retailers need only look at the rise of luxury cruise tourism which is opening new doors to customers wherever they choose to travel. For example, Rolex, Buccellati, Cartier, Panerai, and Piaget are official retailers aboard Explora I.
The post-pandemic travel boom should have been an opportunity for high-end retailers in the U.S. to boost their revenues, but travelers are voting with their feet and wallets. It will take a coordinated approach to win back the trust and confidence of international visitors to choose the U.S. over rival destinations. With major events on the itinerary like the 2026 World Cup (co-hosted with Canada and Mexico), America 250, and the Los Angeles Olympics in 2028, there is no time to lose. The U.S. must reclaim its status, not only as a welcoming country, but also as a destination worth experiencing because every retailer needs a Fabiana, even if it’s just a Tiffany souvenir, to attract those tourist dollars.
