While global tourism is experiencing a robust recovery and growth, the United States is projected to be a notable outlier, facing an estimated $12.5 billion loss in international visitor spending by the end of 2025.
The Looming Deficit: Key Figures
$12.5 Billion Loss: The WTTC and Oxford Economics forecast a staggering $12.5 billion shortfall in international visitor spending for the U.S. in 2025.
7% Year-over-Year Decline: International visitor spending is expected to total less than $169 billion in 2025, a 7% decline from the previous year and a 22% drop compared to pre-pandemic levels in 2019.
Declining Arrivals: Data from the U.S. Department of Commerce shows an 11.6% fall in international arrivals in March 2025 compared to March 2024, with Western Europe leading the decline (Germany down 28.5%, Spain 24.5%, UK 14.8%). Canada is also seeing a significant drop in visitation.
Uneven Impact: Major tourism hubs like New York City are already feeling the pinch, with a revised forecast expecting 400,000 fewer visitors and a $4 billion shortfall in spending for 2025.
Why is the U.S. Losing Ground?
Several interconnected factors are contributing to this concerning trend:
Political Rhetoric and Policies: Experts point to a "growing wave of negative sentiment" towards the U.S. due to "America First" policies, trade tensions, heightened border security measures, and immigration enforcement actions.
This has created a perception of the U.S. being less welcoming, with some travelers expressing fears of unfair detention. Strong U.S. Dollar: A strong dollar makes travel to the U.S. more expensive for international visitors whose currencies have less purchasing power. While beneficial for Americans traveling abroad, it acts as a deterrent for inbound tourism, as foreign tourists find U.S. goods and services pricier.
Increased Costs and Fees: Proposals to increase fees, such as the Electronic System for Travel Authorization (ESTA) fee, are criticized for further deterring visitors.
Global Competition: Other countries are actively "rolling out the welcome mat" and implementing effective strategies to attract tourists, creating fierce competition for the U.S.
Policy Uncertainty: Ongoing trade tensions and policy uncertainty are also negatively impacting business travel spending, with more global travel buyers reportedly canceling or relocating U.S.-based meetings and events.
The Broader Implications
The decline in international tourism has significant economic consequences for the U.S.:
Job Losses: The tourism industry directly employs 20 million people in the U.S. and contributes substantially to annual tax revenue. A decline in visitor spending translates to potential job losses and reduced tax contributions.
Economic Impact: International visitors typically spend more and stay longer than domestic tourists, making their loss particularly impactful.
The economic exposure is large and unevenly distributed across states and cities. Delayed Recovery: The WTTC projects that the U.S. tourism sector will not return to pre-pandemic levels until at least 2030, a stark contrast to the robust recovery seen in many other parts of the world.
What Needs to Change?
To reverse this trend, the U.S. tourism industry and policymakers need to:
Shift Perception: Address the negative sentiment and convey a more welcoming message to international travelers.
Re-evaluate Policies: Consider the impact of immigration and trade policies on tourism and explore sophisticated systems that balance security with welcoming visitors.
Strategic Marketing and Promotion: Intensify marketing efforts in key international markets, showcasing the diversity and accessibility of U.S. destinations.
Collaborate: Strengthen partnerships between federal, state, and local tourism offices, as well as with international travel agencies and influencers.
Enhance Visitor Experience: Focus on providing high-quality customer service, offering diverse experiences (from iconic to off-the-beaten-path), and addressing practical travel information needs.
The global tourism industry is booming, signifying a strong desire for travel post-pandemic.