Retailers and hotels across the United States are bracing for a difficult year as a sharp drop in international visitors threatens to erode revenues and stall recovery in key markets. According to the latest projections from the World Travel & Tourism Council, the U.S. is on track to lose $12.5 billion in international visitor spending in 2025. Total inbound travel revenue is expected to fall from $181 billion in 2024 to just under $169 billion this year – a 7% decline from last year and a dramatic 22.5% drop compared to the 2019 peak of $217.4 billion.
This downturn is particularly alarming for the hotel and retail sectors, which have long relied on the spending power of international travelers. These visitors typically stay longer, spend more, and gravitate toward high-end accommodations and luxury retailers, making their absence especially painful for businesses in major cities and tourism hotspots.
In New York City, for example, international tourists made up only 20% of visitors in 2024 but accounted for approximately half of all visitor spending, contributing $25.5 billion out of the city’s $51 billion in tourism revenue.
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The anticipated loss of 800,000 international visitors in 2025 is expected to result in a $4 billion drop in tourism-related spending for the city alone.
The hotel industry is also bracing for pain. Industry data suggests that every 1% reduction in international arrivals translates into a loss of over half a million hotel room nights annually. With international arrivals projected to drop by 9% in 2025, hotels across the country are preparing for millions fewer rooms booked.
The reasons for this unique downturn are multifaceted. The United States stands out as the only country among 184 economies analyzed by the WTTC that is expected to see a decline in international visitor spending this year, while other nations are experiencing growth.
A strong U.S. dollar has made American vacations significantly more expensive for foreign visitors, reducing their purchasing power and discouraging travel.
Additionally, political tensions, stricter border policies, and confusion around visa requirements have created a less welcoming environment for international travelers. These factors have been especially pronounced for visitors from Canada and Mexico, whose numbers are down about 20% year-over-year.
The financial pain from this downturn will not be evenly distributed. Major urban centers, border regions, and tourism-dependent states are expected to bear the brunt of the losses. In upstate New York, for instance, two-thirds of businesses have reported a significant decrease in Canadian bookings, with some already adjusting staffing levels in response to the downturn.
As of March 2025, international visitor numbers were down more than 11% compared to the previous year, with key source markets like the UK, Germany, and South Korea posting double-digit declines. Industry analysts warn that, at the current pace, it could take until at least 2030 for international tourism to recover to pre-pandemic levels.
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