Foreign visitors to the United States are soon going to see a large increase in the cost of coming to the U.S. As part of the recent domestic policy bill, many foreign nationals entering the US on non-immigrant visas will now have to pay an additional $250 “visa integrity fee” on top of the existing cost of $185 visa cost. Non-immigrant visas apply to tourists, students, temporary workers and other categories.

In 2024, the US issued 11 million non-immigrant visas. More than 6.5 million of these were issued for visitors entering the country for “pleasure” or “business and pleasure.” This new increase in the price of visiting the US has many in the tourism industry worried about how they will be affected. International tourism, considered a service export, generates $200 billion dollars per year for the US economy. This new fee will raise the cost of a vacation for a family of four by $1,000, which may lead many international vacationers to simply vacation somewhere else. If so, this could have a negative impact on economies that rely on tourism, not just for the industries directly related to tourism, e.g. hotels, theme parks, etc., but other non-tourism industries in the area. It may be the case that ensuring “visa integrity” could come at the cost of the entire economies..

Discussion Questions:

  1. List the determinants of the price elasticity of demand and discuss the role that each one may play when foreign visitors need to pay the new visa integrity fee.
  2. Explain why international tourism is considered an “export.”