The State of Travel and the Economy in 2025

It's no secret the relationship between travel and the economy is a tight knit one, with ripple effects from each felt throughout various sectors in a number of ways, from jobs to revenue and more. Come along as we explore some key points examining how the economy in 2025 so far is impacting the travel industry as a whole.

CURRENT STANDINGS AND TRENDS

Research is finding that both international visitors and travel spending are on the decline this year, a trend which could be cause for concern if it continues. The World Travel & Tourism Council (WTTC) forecasts a $12.5 billion loss in U.S. international visitor spending in 2025, dropping from $181 billion in 2024 to under $169 billion—a 22.5% decline from the pre-pandemic peak. Outbound travel, however, according to WTTC, is surging, with Americans traveling abroad in large numbers. Though that doesn't solve the decreasing appeal of tourism to America around the world.

The U.S. Department of Commerce reports a widespread drop in inbound travel:

• UK arrivals are down nearly 15% year over year.
• Arrivals from Germany are down more than 28%.
• Arrivals from South Korea are down almost 15%.

Forbes also reported that land border crossings by Canadians into the U.S. dropped 33% in June 2025 compared to June 2024—a dramatic downturn from the United States' number one source of international visitors last year. This decline is one the Washington Post estimates could cost the U.S. around $4.3 billion in tourism spending.

TD Economics shares that tourism contributes around 3% of the U.S. GDP and 4% of total employment. Though today, many businesses and corporations are responding to the current economic state by announcing workforce reductions.

MAIN DRIVERS

A major factor for the downturn, as reported by Business Insider, has been stricter visa controls, border enforcement, and immigration policy concerns under the Trump administration. Nightmare customs and immigration stories have caused fear in international visitors and even U.S. citizens, leading to many changing their plans, or worse, canceling them fully. Negative sentiment toward U.S. tariffs and trade policy is an additional factor greatly influencing international traveler behavior and decision making.

According to the Wall Street Journal, a weaker U.S. dollar is also playing a factor, reducing U.S. travelers' overseas buying power—but at the same time, a still-strong dollar makes the U.S. less affordable for inbound tourists.

WHERE TO GO FROM HERE

As the year continues—with so much beyond our control—those in the industry must brace themselves for an increasingly unpredictable landscape. However, during this crucial window, there are several avenues within our control for forward movement:

• If your base includes international travelers, center your marketing on rebuilding lost trust and providing a sense of confidence in their travels.

• At the same time, prioritize the domestic market and encourage travel within the U.S.

• Make your voice heard, especially with those who lobby and advocate on behalf of the industry and its respective sectors to policymakers.

• Collaboration with stakeholders, industry partners, and policymakers—both domestically and internationally—remains vital. Seek out as many opportunities as you can to build and foster these relationships.

What remains abundantly clear is how vital the travel industry is as an overall economic driver, further emphasizing the value of investing in and building up the industry now more than ever.

Written by Sarah Suydam, Managing Editor for Groups Today.

This article originally appeared in the Sept/Oct '25 issue of Groups Today.