Key Takeaways:
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- The US is projected to lose $12.5 billion in travel revenue in 2025, with international visitor spending expected to fall below $169 billion, a 7% year-over-year decline.
- The US is the only country among 184 global economies forecasted to experience a tourism revenue drop this year, attributed to lingering COVID-era policies, a strong dollar, and shifting sentiment.
- Major tourism hubs like New York City and regions along the Canadian border are disproportionately affected, with NYC alone expecting $4 billion less in tourism spending.
- Proposed increases in travel costs, such as raising the ESTA fee, could further deter international visitors, delaying recovery until at least 2030.
What Happened?
The US travel and tourism sector, which contributes $2.6 trillion to the economy and employs 20 million people, is facing a significant downturn in 2025. According to the World Travel & Tourism Council (WTTC), international visitor spending is expected to decline by 7% year-over-year, marking a 22% drop from its 2019 peak.
Key factors include the lingering effects of COVID-era travel restrictions, a strong US dollar that has made the country expensive for international visitors, and a shift in sentiment driven by “America First” rhetoric and policies. In March 2025, arrivals from key markets like the UK, Germany, and South Korea were down by 15%-28%, with similar declines from Spain, Ireland, and the Dominican Republic.
Why It Matters?
Tourism is a cornerstone of the US economy, representing 9% of GDP and generating $585 billion in tax revenue annually. The decline in international visitors, who tend to stay longer and spend more than domestic tourists, is hitting major gateways like New York City particularly hard. NYC alone expects 800,000 fewer international visitors in 2025, resulting in a $4 billion revenue shortfall.
The slump also extends to regions like New York’s “north country,” where Canadian bookings have significantly decreased due to tariffs and political rhetoric. Meanwhile, other countries are capitalizing on the US’s challenges by introducing perks like digitized visas, making them more attractive to international travelers.
What’s Next?
The WTTC forecasts that US tourism may not recover to pre-COVID levels until 2030, assuming no further setbacks. Proposed legislation to increase the ESTA fee from $21 to $40 could further deter international visitors, exacerbating the decline.
To reverse the trend, the US must address barriers to entry, such as high travel costs and restrictive policies, while competing with other nations offering streamlined travel experiences. Policymakers and industry leaders should focus on improving infrastructure, reducing travel costs, and promoting the US as a welcoming destination to regain its competitive edge in the global tourism market.
