U.S. tourism business faces 'perfect storm'

The Memorial Day weekend unofficial start of summer travel season comes with cautious optimism rather than the usual fanfare

As the U.S. heads into Memorial Day weekend - typically the kickoff to a vibrant summer travel season - signs of struggle are replacing celebration. A half-empty Finnair flight into Los Angeles underscores a deeper crisis: America’s tourism industry is facing a multifaceted downturn, marked by falling international arrivals, cautious domestic spending, and operational disruptions.

Key takeaways

• Major tourism revenue losses: The U.S. is projected to lose $12.5 billion in travel revenue in 2025, the only country among 184 analyzed to see a decline.
• International tourism hit hard: International visitor spending is expected to drop 7% from 2024 and 22% from 2019, with recovery not expected until 2030.
• Driving factors: A strong dollar, strict border controls, and “America First” rhetoric have diminished the country’s global appeal.
• Regional declines: New York City projects 400,000 fewer tourists and a $4 billion drop in tourism spending; California expects a 9% fall in international visitors.
• Soft U.S. demand: Americans are scaling back travel due to economic concerns. Expedia shares dropped over 7% due to declining domestic bookings.
• Shift toward local travel: While international and long-distance travel weakens, domestic travel has grown 3% as Americans opt for closer, more affordable trips.
• Airlines retrench: Major U.S. airlines are slashing summer schedules and retiring aircraft due to lower demand and operational chaos, including air traffic control issues.
• Warning signs ahead: Experts warn the worst may come during the peak summer months, as economic pressures and logistical issues further dampen travel sentiment.
• Brand damage: The U.S. risks losing its status as a top global travel destination as tourists opt for friendlier, easier-entry markets like Mexico and the Caribbean.

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