Trump policies have had an impact, including a drop in interest from foreign visitors
1) The great summer pullback
Shorter trips. Day trips. Staycations.
After years of splurging, many Americans are budgeting on travel this summer. Fewer households are booking airline tickets or hotel rooms now than they were a year ago, according to data from Bank of America.
Consumer spending on recreation fell 5% in June compared with the previous month, according to Bureau of Economic Analysis data released last week.
The number of people taking time off work in July dropped to its lowest level since the pandemic, according to Labour Department data. Luxury travel has continued to boom unabated.
Fears that looming tariffs could lead to a spike in prices again - following years of high inflation - have pushed Americans to pull back on spending on hotels and airfare.
'Uncertainty about the direction of the economy and rising costs for basic necessities like food and utilities is reducing disposable income - meaning less travel, less vacations,' said Joe Brusuelas, chief economist at tax and consulting firm RSM US. 'Staycations are back.'
Some immigrants are staying home in fear of getting caught in the crosshairs of immigration enforcement.
Several tourist destinations such as Norfolk and Charleston, South Carolina, have seen a steady stream of tourists this summer, according to local business leaders, while other hot spots, such as Las Vegas, are experiencing a sharp slowdown.
Hotel room occupancy in Vegas had fallen more than 12% year over year as of July 19, according to CoStar, a provider of real estate data and analytics.
2) International tourism in decline
International travel to the US is slumping, despite a pick-up in tourists from some countries.
Foreign arrivals to the US by air were down 6.6% in June compared with last year, according to the International Trade Administration.
International arrivals of those staying more than one night are projected to fall 8.2% in 2025, according to Tourism Economics, a global analytics and advisory firm.
Some would-be travellers say they are nervous because of the Trump Administration's policies and rhetoric regarding tariffs and immigration, among other issues.
Stricter visa and immigration requirements have led a number of European countries and Canada to issue travel advisories for the US.
A new visa fee, included in Trump's One Big Beautiful Bill, will increase the cost of travelling to the US by US$250 for many foreigners.
'The US is not endearing itself to the rest of the world,' said Adam Sacks, president of Tourism Economics.
'We're seeing declines from major markets, including Canada, South Korea, Germany, and France due to consistently divisive policy and rhetoric.'
Business leaders in San Diego, Cape Cod, and Bar Harbour, Maine, told the Washington Post they are hearing from hotels and restaurants that fewer foreign tourists are coming this summer.
3) Canadians avoiding the US
Canadians, who make up roughly one in four visitors to the US, are steering clear in reaction to heightened trade levies and hostile comments from Trump about making Canada a '51st state'.
Canadian travel to the US plunged earlier this year and has not recovered.
Restaurants and retailers in New England have reported a 'significant slowdown' in visits from Canadians, according to the July Federal Reserve report.
In the Upper Midwest and Great Plains states, international travel is also down, especially from Canada.
'We have seen a reduction in international visitors in general,' said Paul Niedzwiecki, chief executive at the Cape Cod Chamber of Commerce, adding that the seaside city of Provincetown 'usually sees a higher number of Canadian visitors, and there have been fewer so far this season'.
4) A crackdown on immigration, which fuels the tourism industry
Trump's efforts to stop new immigration, deport hundreds of thousands of immigrants and strip legal status from many more could hurt the tourism industry.
One in three workers in tourism is foreign-born, according to the US Travel Association and the American Hotel and Lodging Association, trade groups that represent the tourism industry.
Since March, the US immigrant workforce has declined by more than 1.6 million, according to Labour Department data released last week.
So far, the sector has not reported a widespread impact on its summer workforce.
That's partially because restaurants and hotels especially on the East Coast have been able to secure seasonal workers on J-1 and H-2B visas for this summer.
The Administration has paused interviews for J-1 visas, which include a programme that employers use to hire over 100,000 foreign students every year to work in jobs including restaurants and amusement parks.
Still, some communities are on alert as immigration authorities have arrested and deported workers in tourism hot spots this year.
In May, Immigration and Customs Enforcement agents arrested some 40 immigrants on Martha's Vineyard, forcing some businesses to temporarily close. US Customs and Border Protection agents have detained more than 20 workers on Carnival cruises off the coast of Norfolk since April, according to the Virginian-Pilot.
5) Reduced labour supply but easing worker shortages
In the years immediately following the pandemic, hotels and restaurants struggled to find and retain workers at the wages they were offering.
Hotels cut back on daily room cleaning. Restaurants automated service. Pools closed.
But the consumer pullback could be helping alleviate employers' labour woes. Job openings in hotel and food services fell by 308,000 in June, according to data released by the Labour Department, and hover near pre-pandemic levels.
The decline in tourism could be softening demand in some sectors and diminishing the need for immigrant workers, economists say.
Federal Reserve Chair Jerome Powell remarked last week that a lack of immigration due to Trump's tougher policies is offsetting a drop-off in demand for workers.
'Demand for workers is slowing, but so is the supply,' Powell told reporters. 'It's in balance.'
In popular tourist destinations, such as Bar Harbour and Niagara Falls, business leaders report that labour shortages that defined summer hiring from 2021 to 2023 have all but vanished.
'The last couple of years I felt so bad that I wanted to go over and help my hoteliers, but this year I haven't heard of any problems in that arena,' said John Percy, president of the tourism promotion agency for the Niagara Falls area in New York.
Hotel occupancy in the border city of Niagara Falls is down more than 7% year over year, he said.
Some states, including Florida, where tourism is a major industry and thousands of immigrants have lost or are losing legal status because of Trump Administration orders, could take a sharp hit in the coming months.
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