Tourism has long been a significant contributor to the American economy, generating billions of dollars for local businesses each year. But recently, things have taken a different turn, where fewer travelers are showing up, and it’s starting to ripple through jobs and communities.
Fewer hotel bookings here, a drop in spending there—it’s adding up fast. The story isn’t just about numbers; it’s about people and places feeling the pinch. Keep reading to see what’s driving the slowdown.
International Spending Drops Unexpectedly
According to the World Travel & Tourism Council, the U.S. is projected to be the only country among 184 studied to experience a decline in international visitor spending in 2025—an estimated $12.5 billion loss compared to the previous year. That’s a striking reversal for an industry that usually grows steadily.
This decline means fewer dollars flow into hotels, restaurants, and attractions that rely on international travelers. The hit may seem distant at first glance, but your local community—from tour guides to small shops—feels the difference when visitors stop showing up.
A Shortfall Larger Than Expected
Tourism Economics, part of Oxford Economics, had originally forecasted 9% growth, worth roughly $16.3 billion. Instead, they revised the outlook to an 8.2% decline. That means the industry missed out on the expected growth and actually suffered a contraction. When you combine the lost gains with the actual losses, the total shortfall amounts to between $25 and $29 billion.
That gap shows how quickly expectations can flip in a consumer-driven economy. For families planning trips or small businesses planning expansions, those projections affect confidence and spending habits across the board.
Jobs Put On The Line
Reports suggest that thousands of tourism-related jobs are at risk if the sector continues its downward trend. Some forecasts indicate that as many as 230,000 positions could be lost, particularly in the hospitality and service industries. When visitor numbers shrink, staffing cuts follow.
For you, this might mean fewer workers at hotels or businesses closing earlier than usual. These changes ripple out to shape the quality of your travel experiences and limit employment opportunities in many communities.
Policies And Perceptions Matter
Analysts point to policies like new visa integrity fees, tougher entry rules, and reduced federal funding for Brand USA—the tourism marketing agency—as reasons for the shift. Forbes notes these measures, combined with global perception issues, are discouraging many international visitors.
When policies create barriers, travelers go elsewhere. That choice affects major tourist hubs and towns that rely heavily on seasonal visitors. From this, it’s evident that global reputation and bureaucratic hurdles can significantly impact the flow of money into local businesses.
Domestic Tourism As A Cushion
Nearly 90% of U.S. tourism spending in 2024 came from domestic travel, based on the Beaumont Enterprise database. That cushion has softened the blow from fewer international arrivals, keeping restaurants, hotels, and attractions busy—especially in popular local destinations.
However, experts warn that relying too heavily on domestic travelers could become risky over time. Without a balanced mix of international and local visitors, the industry may struggle to bounce back fully. It’s a delicate balance, and the scales are tipping.
The Road Ahead
Luxury hotels and high-end experiences remain more resilient, with affluent travelers continuing to spend, according to the “Financial Times”. But small businesses, mid-range hotels, and everyday workers can’t rely on that slice of the market to carry them. They need volume, not just luxury dollars.
The trends unfolding now are shaping where you can travel, how much you’ll pay, and what kind of service you’ll get. Keeping an eye on these shifts can help you understand the true cost of a shrinking tourism sector.
