American tourism faces a 'perfect storm'

Yahoo

26-05-2025

A version of this article originally appeared in Quartz's members-only Weekend Brief newsletter. Quartz members get access to exclusive newsletters and more. Sign up here.
On a recent Finnair flight from Helsinki to Los Angeles, something felt off. The economy cabin — typically packed with tourists eager to explore California's beaches and theme parks — was less than half full. A flight to Europe two months earlier had been packed to the gills, but this flight had entirely empty rows, a stark reminder that America's appeal as a travel destination has taken a beating this year.
That half-empty plane tells a bigger story about American tourism in 2025, one that's playing out just as Memorial Day weekend — traditionally the unofficial start of the summer travel season — approaches with cautious optimism rather than the usual fanfare.
The U.S. tourism industry is facing what experts are calling a 'perfect storm' of challenges. According to data from the World Travel & Tourism Council (WTTC), America is on track to lose $12.5 billion in travel revenue this year — making it the only country out of 184 analyzed that's projected to see tourism dollars decline in 2025.
International visitor spending is expected to fall to less than $169 billion by year's end, a 7% drop from 2024 and a staggering 22% decline from tourism's pre-pandemic peak in 2019. The WTTC said it could take until 2030 for U.S. tourism to bounce back to pre-COVID numbers.
The reasons are complex but interconnected. A strong dollar has made American vacations prohibitively expensive for many international visitors. Stories about strict border controls and immigration enforcement have created hesitation among potential travelers. And the Trump administration's 'America First' rhetoric, while popular domestically, has sent a chilling message to international markets, according to tourism industry leaders.
'Other countries are really rolling out the welcome mat, and it feels like the U.S. is putting up a 'we are closed' sign at their doorway,' Julia Simpson, WTTC's president and CEO, told Bloomberg.
The pain is especially acute along the Canadian border, where 66% of businesses in New York's 'north country' have already experienced significant decreases in Canadian bookings for 2025.
New York City, typically a magnet for international visitors, has revised its 2025 projections downward by 400,000 tourists and $4 billion in tourism spending. California, despite setting tourism records in 2024, forecasts about a 1% overall decline in visitation and a 9% drop in international visitors this year.
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The challenges aren't limited to international visitors. Americans themselves, rattled by economic uncertainty and concerns about potential tariffs, are pulling back on travel spending. This domestic retreat is hitting major travel companies hard.
Expedia's stock dropped more than 7% earlier this monthafter reporting weaker-than-expected U.S. travel demand, with CEO Ariane Gorin telling investors that 'U.S. demand was soft, driven by declining consumer sentiment.' Two-thirds of Expedia's business comes from the U.S., making the company particularly vulnerable to domestic travel slowdowns.
The picture isn't entirely grim. While Americans are cutting back on travel overall, many are simply shifting their plans rather than canceling them outright. Bank of America data reveals that domestic travel is up 3% as Americans, facing economic uncertainty, opt to explore closer to home rather than expensive overseas trips.
And the recent rebound in some international markets offers hope. April saw an 8% increase in overseas visitors compared to the previous year, largely driven by a recovery in Western European travel after March's significant decline. The timing of Easter — which fell in April this year versus March in 2024 — contributed to the bump.
Airlines are scrambling to adjust their operations as traveler sentiment deteriorates. The Conference Board's confidence survey found that Americans intending to fly in the next six months fell more than 12% from January. Major carriers are responding by slashing capacity — Delta is cutting its summer schedule after describing it as 'overbuilt,' while United is retiring 21 aircraft early and reducing flights in Canadian markets.
The industry's challenges extend beyond shifting demand. Airlines are grappling with fresh operational disruptions that have shaken passenger confidence. Air traffic control failures at major hubs like Newark and Atlanta have caused widespread flight delays and cancellations, with outdated radar systems and severe staffing shortages plaguing the country's busiest airports.
Newark has been in near-constant disruption since late April, forcing United Airlines to cancel dozens of flights daily. 'I've had more friends, colleagues and acquaintances say they don't want to fly right now than normal, not because they're scared of crashes, but because they don't want to deal with delays and cancellations,' William McGee, senior fellow for aviation and travel at the American Economic Liberties Project, told CNN.
Industry experts such as Adam Sacks from Tourism Economics warn that the worst may be yet to come. 'We believe that pure leisure travel will be the most reactive and we're not quite in the peak window yet,' he told The New York Times. 'I expect as we get into May, June and July the effects will be more pronounced.'
For now, that half-empty Helsinki-to-LAX flight serves as a quiet reminder that America's brand as the world's premier travel destination isn't guaranteed. While domestic travelers may be filling some of those empty seats this Memorial Day weekend, the international visitors who typically stay longer and spend more are increasingly choosing destinations like Mexico, the Caribbean, and other markets that offer easier entry and warmer receptions.
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