‘Evolving Federal Policies’ Spark Worries That Tourism Could Tank This Summer

Fears over the economy, fallout from tariffs, and foreign tourists avoiding the United States because of Washington politics could spell trouble for the travel industry this summer.Travel and tourism is estimated by the U.S. Travel Association to add roughly 2.5 percent to America’s $29 trillion economic output annually. Any downturn could be widely felt since an estimated 8 million American workers are directly employed by the industry. A Bankrate survey found that fewer than half of Americans plan to travel this summer. Only 46 percent of respondents planned at least one trip, compared with 53 percent last summer. Many blame worries over the economy. Another survey from The Vacationer forecast that summer travel is expected to drop three percent this year.Airlines are cutting flight schedules and many are not releasing full-year earnings estimates due to uncertainty over the economy. The National Travel and Tourism Office reports that non-U.S. citizen air passenger arrivals to the United States from foreign countries were down 9.7 percent in March compared with a year ago. The agency says that is about 13 percent lower than pre-pandemic volume.Southwest is the latest carrier to announce it is cutting the number of flights in the second half of 2025 due to weakening demand. It also warns of “macroeconomic uncertainty” and will no longer offer full-year company earnings estimates. Delta and United are also pulling earnings estimates for 2025.JetBlue was the first airline to report deteriorating bookings. It had a strong January but bookings fell off in February and worsened in March. “We expect softened demand for off-peak travel to continue into the second quarter,” JetBlue’s president Marty St. George says.Airbnb reports that more increasingly cost-conscious Americans are choosing to drive rather than fly for their summer trips with 45 percent planning to stay within 300 miles from home. The vacation rental company says travelers are becoming more likely to book last-minute trips.AirDNA, which tracks data around short-term vacation rentals, is revising down the expected demand this year. It is already seeing a roughly 12 percent decline in visitors from Canada, as well as fewer tourists coming from Western Europe.AirDNA chief economist Jamie Lane says U.S. travelers who want to stay stateside could help make up the difference.“That could be sort of our savior this summer as we look at the outlook with the dollar falling,” Mr. Lane tells the New York Sun. “It could make it more attractive for Americans to stay domestic this summer instead of traveling overseas.” He says that markets that rely on Canadian visitors are being hit. Statistics released by the Canadian government show Canadians traveling by air from the United States was down 19.5 percent in March and returns trips by automobile were down 31.9 percent year-over-year.Popular travel destinations like Las Vegas say it is too soon to see the effects of “evolving federal policies” on tourism there, but a report released Thursday shows a 7.8 percent decline in visitors in March and hotel occupancy down 2.4 percent. Room nights occupied are also down 6.1 percent.A Las Vegas Convention and Visitors Authority spokeswoman said they don’t yet have any definitive data projecting long-term changes in visitor spending. But hotels in Sin City are already making cost cutting moves. MGM Resorts ended concierge services at several of its properties on the strip and dozens of those workers reportedly face layoffs.Despite the concerns about a drop in U.S. tourism, President Trump is painting a rosier picture. “Tourism is gonna be way up,” Mr. Trump told ABC News in an interview. “Tourism’s doing very well. Wait until you see the real numbers come out … in six months from now.”_______________Correction: Roughly 2.5 percent is contributed by travel and tourism to America’s total GDP of $29 trillion, according to the U.S. Travel Association. An earlier version misstated the level of tourism spending as a percentage of the GDP.

‘Evolving Federal Policies’ Spark Worries That Tourism Could Tank This Summer

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