America hit with massive $12B travel deficit in 2025, expected to get worse thanks to Trump

America is facing a brutal collapse in tourism this year, with $12.5 billion in travel revenue already wiped out, and the year isn’t even half done.

The World Travel & Tourism Council (WTTC), in data shared with Bloomberg, said that visitor spending will likely sink below $169 billion by December. That’s a 7% drop from last year and a devastating 22% crash compared to 2019, which was the last time travel peaked.

Out of 184 economies studied with Oxford Economics, America is the only one losing money in tourism this year. WTTC’s President and CEO Julia Simpson called it out clearly: “Other countries are really rolling out the welcome mat, and it feels like the US is putting up a ‘we are closed’ sign at their doorway.”

The warning is sharp, because this isn’t some minor industry. Travel and tourism in America is worth $2.6 trillion. It powers 9% of the economy, pays for $585 billion in taxes—7% of everything Washington collects—and supports 20 million jobs.

But instead of fixing the leaks, Trump’s second-term immigration stance and isolationist talk are making the holes wider.

Tourist drop hits international numbers first

The crash didn’t come out of nowhere. The sector has been falling apart since COVID, especially under Joe Biden, who kept travel restrictions long after other countries scrapped theirs. That was strike one. Then the strong dollar made visiting the US too expensive. Julia said, “The Japanese used to visit the US a lot, but the strong dollar made it quite an expensive place. Same with Europeans.”

Now, Donald Trump’s return to the White House is turning the dip into a freefall. International travelers are avoiding America because of what Julia called a dangerous “sentiment shift.” She said, “Legislators need not confuse the tourism sector with issues around illegal immigration. A sophisticated system can balance both without turning [the country] into an island that no one wants to visit.”

The latest numbers from March 2025 back her up. UK tourists dropped 15%, Germany fell by 28%, South Korea slipped 15%, and visitors from Spain, Ireland, and the Dominican Republic fell anywhere between 24% and 33%. This isn’t small. These countries made up some of the most valuable visitor groups for America.

Cities, states, and borders take the heat

That $12.5 billion drop isn’t being felt the same way everywhere. New York City and its state are getting slammed. On May 8, the city’s tourism board cut its own forecast and warned of 400,000 fewer visitors this year. That means $4 billion in lost revenue.

Officials now expect 64 million tourists for 2025, but while 400,000 more Americans will take trips within the five boroughs, 800,000 fewer foreign tourists will show up. The difference stings because international travelers stay longer and spend more. Last year, they made up half of the city’s $51 billion tourism haul.

The economic punch is hitting upstate too. Governor Kathy Hochul said on April 29 that in New York’s “north country”—the region near Ottawa and Montreal—66% of tourism businesses are already seeing “a significant decrease” in bookings from Canadians. She blamed it on Trump’s “51st state” rhetoric and his tariffs. A quarter of those businesses have already changed their staffing plans to survive the downturn.

Industry leaders now say this isn’t just a bad year. It’s going to take until 2030 for tourism in America to climb back to where it was before COVID—if nothing else goes wrong. That’s a big if. Lawmakers are eyeing changes to the ESTA system—the visa waiver program tool that costs $21 per traveler right now.

A bill moving through Congress could push that up to $40. Julia doesn’t think that’s smart. “If you push the right buttons, it will bounce back. But increasing the cost of an ESTA will only deter people further.”

It’s a weak spot America can’t afford. Domestic travel already makes up 90% of the tourism market, so there’s no room to grow it. Meanwhile, countries like India, China, and nations in the Middle East and Europe are upgrading their systems, offering digital visas and perks to get tourists in fast. Julia had one last thing to say: “It’s only Americans that are being left behind and losing out.”

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