The U.S. trade war creates the biggest uncertainty for the travel industry since the COVID-19 pandemic
May 6, 2025
Travel demand in the United States is weakening sharply in 2025, with major airlines, hotel chains, and travel platforms issuing grim forecasts. Analysts warn this slowdown – fueled by rising anti-American sentiment, Trump-era trade policies, and a cautious consumer outlook – could deal a multibillion-dollar blow to the U.S. economy. The downturn in international tourism and softening domestic travel spending come amid broader economic concerns, including the first U.S. GDP contraction in three years and persistently weak consumer sentiment.
Key takeaways
- Travel slowdown: Leading travel companies like Delta, Southwest, and Airbnb report significantly weakened demand, scrapping or lowering their 2025 forecasts.
- Economic impact: Goldman Sachs and J.P.Morgan estimate reduced foreign tourism could shave 0.1% to 0.3% off U.S. GDP, amounting to a $23–$71 billion hit.
- Trade policy effects: Trump administration tariffs and strained relations with allies are seen as major contributors to declining international tourism and consumer sentiment.
- Tourism contribution: In 2024, international tourism spending made up $215 billion (0.7%) of U.S. GDP. A 10% reduction would result in a notable GDP decline.
- Consumer behavior: Both international visitors and Americans are pulling back on discretionary spending, reflecting economic uncertainty and recession fears.
- Wider industry pressure: The U.S. travel and tourism sector, responsible for 3% of GDP and over six million jobs, is experiencing a marked deceleration after two strong years.
Get the full story at Reuters
