
The United States, long celebrated as the world’s largest and most influential travel and tourism market, is facing an unprecedented decline in international tourism revenue in 2025, with losses projected at $12.5 billion. This sharp drop will see foreign visitor spending fall to just under $169 billion, compared to $181 billion in 2024, marking a 7% year-over-year decrease and a staggering 22.5% decline from the sector’s previous peak.
Unlike other major economies, the U.S. stands alone among 184 countries analyzed by the World Travel & Tourism Council (WTTC) and Oxford Economics as the only nation expected to see a drop in international tourism spending this year.
This downturn is not merely a statistical anomaly but a direct blow to the broader U.S. economy, which relies heavily on tourism for jobs, tax revenue, and community vitality. The travel and tourism sector is valued at nearly $2.6 trillion and supports about 20 million jobs nationwide, while generating $585 billion in tax revenue—about 7% of total U.S. tax income. The effects of this decline are being felt unevenly, with gateway cities and regions near the Canadian border hit hardest.
For example, New York City has revised its 2025 forecasts, now expecting 400,000 fewer international tourists and a $4 billion drop in tourism spending compared to 2024. Upstate New York and northern border businesses are also reporting significant decreases in Canadian bookings, with 66% noting a "significant decrease" and 26% already reducing staff.
Several factors are driving this negative trend. The strong U.S. dollar has made travel to the U.S. more expensive for foreign visitors, while recent political rhetoric, new tariffs, and stricter border enforcement have contributed to a perception of the U.S. as less welcoming. The imposition of tariffs and controversial statements—such as suggestions that Canada should become the "51st state"—have provoked backlash, particularly from Canada, which was previously the largest source of visitors to the U.S..
Canadian leisure bookings to the U.S. dropped 40% in March 2025 compared to the previous year, and European inbound travel fell by 17% in the same period. Overall, international arrivals are predicted to decline by 9.4% in 2025, with air visitors from Mexico down 23% and a 3.3% decrease in overseas visitors during the first quarter of the year.
The situation is exacerbated by travel advisories issued by countries like Canada, the U.K., and Germany, warning their citizens about heightened risks when traveling to the U.S. due to incidents of detentions and refusals at the border. If such advisories spread to more countries, experts warn that the cumulative impact could reach as high as $120 billion in lost tourism revenue, should inbound travel decline by 10%.
Despite robust domestic travel—Americans are expected to spend $1.35 trillion on travel in 2025—the heavy reliance on homegrown tourism cannot compensate for the loss of international visitors, who tend to stay longer and spend more. Industry leaders, including WTTC President Julia Simpson, have called for urgent action from the U.S. government to restore international traveler confidence and reverse the perception of the country as unwelcoming.
Without decisive intervention, the U.S. risks not only prolonged economic damage but also a diminished status in the global tourism landscape, with recovery to pre-pandemic levels potentially taking several more years.