US Economy Faces $20 Billion Loss as Foreign Tourism Declines Sharply in 2025

The United States is experiencing a significant downturn in foreign tourism, putting nearly $20 billion in retail spending at risk this year. Data from the International Trade Administration (ITA) shows a nearly 10% drop in non-citizen air arrivals in March 2025 compared to the previous year. This decline marks the steepest fall since the pandemic’s second wave and signals a broader retreat of international visitors amid rising geopolitical tensions, stricter border controls, and growing boycotts of American products.

The tourism sector, which generated a record $254 billion in revenue in 2024, had been on a recovery path following the easing of pandemic restrictions. However, recent developments—including harsh detentions of travelers at US airports, controversial tariffs, and aggressive political rhetoric—have dampened the US’s appeal as a travel destination. Notably, Canadian tourism, historically the largest source of foreign visitors, has seen a dramatic drop, with air arrivals down 13.5% and land arrivals falling nearly 32%. European visitors have also declined sharply, with Western Europe arrivals dropping 17% year-on-year.

Economic analysts warn that the tourism slump, combined with boycotts and trade tensions, could reduce US GDP growth by up to 0.3%, potentially costing the economy around $90 billion in total. Early signs of this downturn are evident in falling airfares, hotel rates, and car rental prices, especially in regions like the Northeast, which heavily rely on Canadian tourists. The hospitality industry faces risks to jobs and revenue, with estimates suggesting that a 10% drop in Canadian tourism alone could threaten 140,000 hospitality jobs.

Despite the challenges, some regional tourism bodies like Oregon’s Travel Commission continue efforts to attract international visitors, though they are also considering shifting focus toward domestic tourism amid uncertainty. The situation reflects a broader shift in global travel patterns and highlights the economic vulnerability of the US to geopolitical and policy-driven disruptions in international tourism