The U.S. tourism sector is facing a sharp decline in 2025, with job losses expected to reach more than 230,000 as international visitors stay away. The downturn, driven by trade policies, travel restrictions, and concerns over social issues, is set to cost the country $12.5 billion in tourism revenue this year, according to LinkedIn News.Â
Economic modeling from IMPLAN shows that industries most dependent on international tourism are being hit the hardest. These include dining, lodging, entertainment, and retail, many of which are labor-intensive and highly sensitive to changes in consumer demand.Â
If current trends continue, the total economic contraction could reach $23.17 billion, including $13.25 billion in lost income.
The U.S. is currently the only economy out of 184 surveyed that is projecting a drop in tourism. International air travel to the U.S. is already down by 2%. Airlines such as Air France, British Airways, and Lufthansa have begun cutting back flights.Â
Canadian travel to the U.S. is expected to fall by 33%, which alone could account for $6 billion in lost spending and 40,000 jobs.
Among the sectors expected to suffer the most job losses are hotels and motels, including casino hotels, which could lose over 41,000 jobs. Limited-service and full-service restaurants are projected to lose more than 40,000 jobs combined. Other impacted industries include sports and recreation centers, gas stations, and performing arts organizations.
Secondary industries are also at risk. As spending declines in tourism-heavy sectors, businesses such as advertising firms, law offices, banks, insurance companies, and food suppliers could face reduced demand. The slowdown is expected to affect a wide swath of the economy, from transportation and retail to personal care and cleaning services.
Tourism contributes nearly $3 trillion to the U.S. economy and supports about 9.5 million jobs, according to the International Trade Administration. In 2023, it represented 22% of all U.S. services exports and 7% of total exports.
Major cities are already bracing for losses. Washington, D.C. is expecting a 6.5% drop in international visitors. Last year, tourism in the capital supported over 100,000 jobs and brought in $11.4 billion in spending. New York City officials are predicting a 17% decline in foreign tourists, who spent $23 billion in the city in 2024.
The decline in travel from Canada has been especially sharp. Following the announcement of tariffs on Canadian goods, air travel from Canada to the U.S. dropped 70% in March.
If international tourism continues to decline, the economic fallout is likely to grow. Job losses will not be confined to major travel hubs but will spread across the country, affecting communities large and small.
