US Tourism Faces Billions in Losses as 'America First' Policies Deter Visitors

 

The perception of America as a 'dreamland' – a destination to visit at least once – is facing a severe challenge.

 

The current US administration's policies are causing many countries to view the United States as "unwelcoming to foreign nationals," a trend now projected to cost the American tourism sector over $12.5 billion this year.

 

Bloomberg reports that the US is bracing for a significantly poor year for tourism. Recent data from the World Travel & Tourism Council (WTTC) indicates that the US could lose $12.5 billion in tourism revenue in 2025, with overall tourist spending expected to fall below $169 billion by the end of the year.

 

These figures represent a 7% year-on-year decrease in tourist spending and a sharp 22% decline since US tourism peaked in 2019. This places the US in a starkly different position from other nations.

 

Among the 184 economies worldwide analysed by WTTC in collaboration with Oxford Economics, the US is the only one projected to lose tourism revenue this year.

 

 

Julia Simpson, WTTC President and CEO, stated, "Other countries are rolling out the red carpet, and it seems the US is putting a 'closed' sign on their door."

 

Simpson warned that the consequences could be severe. Citing WTTC and Oxford Economics data, she highlighted that the US travel and tourism sector is the largest globally, valued at nearly $2.6 trillion, with direct and indirect tourism contributing 9% to the American economy.

 

Tourist spending accounts for direct tourism revenue, whilst indirect revenue represents the broader economic impact, such as increased spending by those working in the hospitality and tourism sectors.
 

 

The US tourism industry employs 20 million people and generates $585 billion in tax revenue annually for the US government, approximately 7% of total tax revenue. Simpson underscored that this revenue is a crucial pillar of the US economy.

 

With the US tourism industry having faced challenges for several years, Simpson cautioned that a shift in public sentiment is now transforming a crack in America's tourism economy into a deep chasm.

 

International travel data from the US Department of Commerce indicates that tourists have already changed their behaviour, influenced by the current US administration's "America First" policies and rhetoric.

 

"What we are seeing now is a change in sentiment, which is very sad," Simpson said. 

 

 

 

She added, "Lawmakers should not confuse or equate tourism with the problem of illegal immigration. A sophisticated system can balance both without making [the country] an island that no one wants to visit."

 

Latest data from March 2025 shows a significant decrease in the number of tourists from key markets visiting the US. Tourist numbers from the United Kingdom dropped by 15% year-on-year, Germany by 28%, and South Korea by 15%. Other significant tourist markets, including Spain, Ireland, and the Dominican Republic, saw declines of 24-33%.

 

The decline in revenue will not impact all areas of the US equally but will severely affect major US gateway cities and tourist areas along the Canadian border, such as New York City.

 

On 8th May, New York's tourism agency revised down its positive forecasts for 2025, a year that was previously expected to mark a full recovery from the impacts of the Covid-19 pandemic.

 

 

The tourism authority now projects a total decrease of 400,000 visitors and a $4 billion  reduction in tourism spending compared to 2024.

 

Whilst New York still expects 64 million total visitors this year, with domestic tourists projected to increase by 400,000, it anticipates a decrease of 800,000 international visitors—a crucial group for the city's five boroughs.

 

 

However, New York remains optimistic that international tourists may stay longer and spend more, given that in 2024, foreign visitors generated about half of the city's $51 billion in tourism revenue.

 

New York Governor Kathy Hochul revealed that these declining figures extend to the northern regions of the state. Approximately 66% of tourism businesses in "Upstate New York," near Ottawa and Montreal in Canada, have seen a "significant drop" in Canadian bookings this year.

 

According to a news report published on 29th April, Governor Hochul stated that these figures were impacted by President Donald Trump's rhetoric about Canada becoming the "51st state" and by tariff policies.

 

Around 26% of businesses in upstate areas have already reduced staff in response to the sluggish tourism.

The damage to tourism is considered severe. WTTC currently estimates that US tourism may take until at least 2030 to fully recover to pre-Covid levels, assuming the situation does not worsen.

 

Simpson mentioned that industry stakeholders are also aware of a proposed law that would increase the cost of the Electronic System for Travel Authorization (ESTA), which is required for tourists from visa-waiver countries planning to travel to the US.

 

Currently costing $21 per person, this fee could increase to $40 per person if the law is implemented.

 

"The important thing about tourism is that it's very resilient," she said. "If you press the right buttons, it will bounce back. But adding costs to ESTA will only make people more hesitant."

 

Simpson warned that this cost is hard for the US to offset. Currently, 90% of US tourism revenue comes from domestic travel, or Americans travelling within the 50 states, which makes it difficult for the sector to grow further.

 

Simpson added that, simultaneously, other countries are actively trying to make it easier for people to visit by offering new incentives, such as digital visas.

 

"India is booming, the Middle East is booming, China is booming, Europe is doing great," Simpson concluded. "It's only the Americans who are being left behind and losing out."