International Tourism to the U.S. Declines, Potential Economic Losses Estimated in Billions

International tourist spending in the United States is projected to fall by $8.5 billion in 2025, marking a 5% decline from the previous year, according to a recent report by Oxford Economics. The downturn, driven by a drop in international arrivals and negative perceptions of U.S. policy, could deliver significant economic repercussions.

“Perceptions of the US matter,” wrote Aran Ryan, director of industry studies at Tourism Economics, a subsidiary of Oxford Economics.

People in an airport | Source: Pexels

He noted that international arrivals are expected to decline by approximately 9% this year, with flight bookings from Europe and Canada pacing more than 10% and 33% behind, respectively.

Policy-related sentiment, particularly stemming from trade and immigration actions during the Trump administration, has created what Ryan termed “sentiment-headwinds” for potential travelers. A strong U.S. dollar, which increases the cost of goods and services for foreign visitors, and concerns about global economic growth, are also contributing to the decline.

The World Travel & Tourism Council projects even greater losses, estimating a $12.5 billion shortfall in international visitor spending for 2025. The U.S. Travel Association warns that the figure could reach $21 billion if current trends persist, noting that every 1% drop in foreign visitor spending results in $1.8 billion in lost revenue.

People in an airport | Source: Pexels

Concerns over immigration enforcement are also playing a role. “Whether fair or not, a perception is taking hold that more people are being detained, more devices [are] being searched and legal travelers [are] being deported back to their origin country,” said Geoff Freeman, president and CEO of the U.S. Travel Association.

Oxford Economics had previously forecasted a 9% increase in international arrivals and a 16% rise in visitor spending heading into 2025.