The U.S. is doubling the cost for visitors from close allies and security partners to come to the country. The price of an “ESTA” or Electronic System for Travel Authorization which passengers entering the United States on a visa waiver is going from $21 to $40. And that doesn’t reflect rising costs – the fee is currently $17 to fund travel marketing for the U.S. as a destination, and $4 for processing. The reconciliation bill also cut funding to Brand USA by 80%.
ESTA Fees Going Up For Visitors
The One Big Beautiful Bill Act raises the price of an ESTA from $21 to $40. That’s the fee to be screened and granted permission to travel to the U.S. for business or tourism. The new breakdown for this fee is:
- $10 for administering ESTA
- $13 straight to the general fund (which was scored for the bill as deficit-reducing)
- $17 for the Travel Promotion Fund – but with transfers capped at $20 million and the excess swept to the general fund. The balance becomes a ‘tourism tax’ rather than a marketing fee.
ESTA is required for visitors from 42 countries who can travel to the U.S. without a visa. That includes much of Europe; Australia and New Zealand; Qatar; Japan, Taiwan, South Korea and Singapore among others. (An ESTA isn’t needed for most Canadian or Bermudan visitors, who have separate entry arrangements.)
An ESTA is valid for two years per approval. The fee is a travel tax hike on millions of international tourists. This administration has not been friendly towards foreigners traveling to the United States, however the clear focus of this change is penalizing legal visitation.
While seemingly small relative to the cost of international travel, a family of four will pay $160 (versus $84 previously). Higher entry costs, combined with prolonged visa interview waits and the perception of strict U.S. entry policies, further reduce the appeal of the U.S. as a destination. Overall this change is expected to generate $3.5 billion in general fund revenue over five years.
Travel Marketing Gets Cut 80%
The bill reduces by federal funding for the Corporation for Travel Promotion (Brand USA) from $100 million to $20 million per year, an 80% or $80 million cut, through FY2027.
The mission of this travel promotion group is to market the United States as a travel destination, and it historically matched private sector contributions with federal funds. There is no mandated reduction in private sector contributions to this entity.
Brand USA was created by the Travel Promotion Act of 2009 and federal funding has come from ESTA fees (which are going up!). It was how ESTA proponents could claim that charging visitors to come here promoted visitors coming here. (Normally when you tax something, you get less of it.)
Many state and local tourism boards squander millions and dodge accountability. I’m genuinely not clear on the effectiveness of Brand USA. But it’s pretty clear that promoting more people coming to the United States does not align well with this administration’s priorities.
D.C. Airports Have To Send More Money To The Federal Government
The federal government owns Washington’s Dulles and National airports, and leases them to the Metropolitan Washington Airports Authority.
Currently, the airport authority pays about $7.5 million a year in rent based on a 1987 lease with a $3 million base rate plus inflation adjustments. This is generally considered below-market rent. The airport authority and Department of Transportation just signed a lease extension in 2024 running through 2100 on the same payment terms.
Section 40007 of the One Big Beautiful Bill Act mandates that starting in 2027, MWAA “must pay $15 million per year (adjusted annually for inflation)” to the federal government for the two airports, and the lease must be renegotiated at least every 10 years thereafter. Each renegotiation must ensure the payment is not less than $15 million in 2027 dollars. The bill overrides the lease extension signed last year.
The change was inserted during committee drafting in the Senate by Ted Cruz (R‑TX), chairman of the Senate Commerce, Science & Transportation Committee as one measure to help pay for the bill. Senator Mark Warner (D-VA) offered a floor amendment directing the new lease revenues to airport safety projects, but it failed on a 50‑50 vote. (Directing the spending of the revenue would not help pay for the bill!)
The airports generated $849 million and the Dulles Corridor Enterprise Fund (toll road) generated $206 million in 2023, for $1.055 billion, not including investment gains, passenger facility charge transfers, federal grants, or capital contributions. The agency’s total inflows were over $1.3 billion for 2023.
Currently, lease cost is less than 1% of airport revenue. That will go up to around 1.5% and represents an increased expense of around 35 cents per emplaned passenger. Government-run airports which receive federal grants do not make a profit per se – they invest revenue remaining after funding operations in capital projects. So this change redirects a few million dollars each year from capital investment in the airports to the U.S. Treasury. Of course how well run and how well the airport authority has invested funds in the past has come under significant fire time and again.
National Airport dates to 1941 and Dulles airport to 1962. They were built and run by the Civil Aeronautics Administration and later by the FAA. The Holton Commission was formed in 1984 to explore transfer of the airports to local control. This culminated in the Metropolitan Washington Airports Act of 1986 which authorized the Departmnet of Transportation to lease both airports to the new Metropolitan Washington Airports Authority.
In 1991, the Supreme Court struck down the 9-member Congressional Board of Review that could veto airport authority decisions under separation of powers (Metropolitan Washington Airports Auth. v. Citizens for the Abatement of Aircraft Noise).
(HT: Daniel)
Maybe middle class Americans will finally be able to afford an occasional trip to Disney World again with less foreign tourist competition. The US has the third most international arrivals per year (72.4 million last year) with foreign tourists largely flocking to a few prime spots like Disney World, Hawaii, and NYC, pricing out the average American in the process. A modest reduction in arrivals might be bad for corporate shareholders, but it would be a boon for middle class Americans who always dreamed to visit Disney World but could never make it work due to the exorbitant demand-driven prices.
Yes, I recognize that other countries could respond in kind. But I would contend that their natural wonders and tourist attractions should be for their own citizens first with international tourists providing a secondary supplement. When I visited the Philippines, for example, I was sad to talk with many Filipinos who dreamed to visit nearby paradise islands like Boracay and Bohol but were permanently priced out from doing so.
This is done to inhibit people with little means that will scrap enough money together for a US tourist visa and cheap plane ticket to overstay their time and attempt to live here. I see this is a good thing. People with a job and life awaiting their return will pay the money, spend money here and do what we expect them to do. Return home.
Politicians are usually not strategic thinkers.
Added to that is the tremendous red tape for immigration. Either let people come in or don’t but it shouldn’t be mountains of red tape and litigation.
While there is a security benefit to some sort of ETA registration, it should be free to countries that offer America a similar benefit. Those are countries who has have ETA’s or similar and who are economically similar. That would be the visa waiver countries mostly.
One problem with immigration is that public benefits are given to new immigrants. In Canada, they don’t allow that. In the 1800’s, immigrants to America had to survive on their own or with the help of relatives and did not get food stamps, Medicaid, Section 8 housing, etc.
@1990 — “You’d better believe that’s a paddlin’” Speaking of Phillip J Fry, on my AA flight last week I rewatched “Viva Mars Vegas” and in the words of Zoidberg after losing $10B+ in roulette, “easy come, easy go”. Not sure how that’s relevant but this thread reminded of it ha
80 to visit New Zealand so what’s your point. It is just a moneymaker for every government
@Steven — You must be naive to think any corporation, especially Disney, is going to lower prices, ever. Also, it’s more likely that there will cease to be a ‘middle’ class based on these economic policies (far beyond the silly ESTA; think, more so, the wealth-killing tariffs, if ever He doesn’t TACO.)
@George Romey — The real question is whether they can test for Cluster B on these silly forms. I haven’t forgotten your theories, sir.
@L737 — “Eh, loosen up, you can’t take it with you…” Futurama remains one of the GOATs. I’m also getting some Jeremiah Whitewhale vibes in this here comment section. “Really, Diane?”
@CGK Remember that these are not “new” tax cuts, but rather an extension of expiring cuts from Trump’s first term. The tax structure next year will remain pretty much the same as last year. Also keep two things in mind: 1. while the wealthy receive the greatest benefit (up to 4.4% increase in after tax income for those earning $460K to $1.1M, and about 3.5% above that income strata), the top 1% (>$600k yearly income) pay 26% of all income taxes. The bottom 47% pay nothing or actually get net cash back. That’s a pretty progressive tax policy. So yes, if you pay more tax, you get more benefit from the extension. 2. Despite this, those earning $50K to $100K will still receive an average benefit of $1,000 from the extension.
To answer your question, I think we should not have extended the entire package. We should have accepted an across the board tax increase vs 2024 sufficient to have an impact on the deficit while allowing the economy to grow. We need a multi-mode approach to the debt: modest tax increase, economic policy that grows revenue, targeted reduction in unearned benefits (e.g. Medicaid work/school requirement for able bodied working age persons not caring for a child or disabled person), cuts in the Federal workforce, reduction in foreign aid (we borrow money to give it away), and better accounting and performance milestone payments for federal spending.
LHR to PHL(or any U.S. airport) UK airport departure tax is $213.00 per person, looks as if this is a step to even the playing field. $40/pp is cheap compared to what U.S. travelers pay abroad.
U.S. airlines pay upwards of $4600 landing fees in UK & EU, in contrast foreign airlines only pay up to $500 landing fees in the U.S. Whining about lost tourism dollars for a $20 increase is just looking for something to complain about.
Many EU destinations require an entry fee. And yes, there is a factor of have/have nots. Take, for example, Venice. All sorts of low means people gather up a backpack and take some sort of government sponsored train from Serbia, Slovaki, etc. In their backpacks, is lunch and provisions. They trample Venice all day and never leave one dollar/Euro there. This creates a real problem for the city.
South America and Europe will reciprocate. The high school or college graduation trip for many American families will become more expensive or a thing of the past.
Idiotic government beurograts, they should fight for freedom and not to erect barriers between people, who are the same under God (so there’s hope they will go to hell for this mistreatment of humans made in His image).
@Jack Meehoff — Nice name. You sure you aren’t the same fellow as @Erect or @E. Jack Youlater (or @Mike Hunt)? As for Venice, I was under the impression it was the cruise ship passengers who are the issue (as with other destinations like Santorini), but rarely are those Balkan citizens; often, it’s Americans, British, etc.
When you democratize travel you give people who didn’t previously have the means the means to move about the planet. So many people on here see charging fees as a good thing, until the fees negatively impact them. Then, is pearl-clutching, vapors-inducing, “oh, the humanity” level whining.
These foreign visitors you complain about are keeping the economies of places like Florida afloat. You can say all of the actions being taken by the US are good, but we are seeing the impact and people, Americans, are starting to lose their jobs. Tourism is down appreciably. We can feel it here.
And no, @Steven it is not going to make things affordable for middle class America. Disney and Universal aren’t focused on middle class America. They are focused on profit maximization. If you honestly think companies who entice people to pay more to jump the line are interested in affordability I’ll have what you’re smoking.
“Just came back from Europe and the hate for what US has become is everywhere. Even in Greece and Iceland.” I’m in France and have been for a weeks. If there is hate for the U.S. here, they not only hide it, but are willing to pretend they like us. (I’m in France, not the Parisian Exclusion Zone.) Really, I know a number of citizens and ex-pats here. They report to me the French born are paying little attention to US politics. We agree that Trump’s a dim boor and move on.
@Parker — ‘Oh, the vapors!’ Excellent.
@This comes to mind — Have you spoken to any French winemakers recently? Because it’s not His demeanor they have a problem with, though, yes, boorish, or rather ‘boar on the floor!,’ but, rather, their bottom line is gonna be hurt by these wealth-killing tariffs. Could be good for California wines, but I thought folks such as yourself hate that ‘blue’ hellhole anyway. Just can’t win, can we… psh.
“80 to visit New Zealand so what’s your point. It is just a moneymaker for every government” No, it’s closer to $70. My point is that the new US fee is not egregious compared to NZ. In the future, I’ll add a link to the Cliff notes for my overly complicated posts.
@1900 — “If you wanna do something about it, just make a billion dollars and murder me”
You know when ‘America’ was actually ‘great’…when we try to live up to the ideals of the “Give me your tired, your poor, your huddled masses yearning to breathe free” is a famous line from Emma Lazarus’s sonnet “The New Colossus”, inscribed on the Statue of Liberty’s pedestal. These days, sadly, it feels like we should give her back to France, because at least they are ‘still trying,’ and some of you would rather exile half the country and put up a ‘golden idol’ of #45/47 in its place. Like, did none of you see the Civil War film? 3rd terms don’t end well…
I often fly from Australia to Canada and need to transit a US airport. I only need an ESTA as the USA doesn’t provide sterile transit.
ESTA started at $14, jumped to $21 and is going to $40. That’s AUD61. One further reason to avoid flying UA (I’m a 1MM), DL, AA or QF via the West Coast.