The Memorial Day weekend unofficial start of summer travel season comes with cautious optimism rather than the usual fanfare
May 27, 2025
As the U.S. heads into Memorial Day weekend – typically the kickoff to a vibrant summer travel season – signs of struggle are replacing celebration. A half-empty Finnair flight into Los Angeles underscores a deeper crisis: America’s tourism industry is facing a multifaceted downturn, marked by falling international arrivals, cautious domestic spending, and operational disruptions.
Key takeaways
- Major tourism revenue losses: The U.S. is projected to lose $12.5 billion in travel revenue in 2025, the only country among 184 analyzed to see a decline.
- International tourism hit hard: International visitor spending is expected to drop 7% from 2024 and 22% from 2019, with recovery not expected until 2030.
- Driving factors: A strong dollar, strict border controls, and “America First” rhetoric have diminished the country’s global appeal.
- Regional declines: New York City projects 400,000 fewer tourists and a $4 billion drop in tourism spending; California expects a 9% fall in international visitors.
- Soft U.S. demand: Americans are scaling back travel due to economic concerns. Expedia shares dropped over 7% due to declining domestic bookings.
- Shift toward local travel: While international and long-distance travel weakens, domestic travel has grown 3% as Americans opt for closer, more affordable trips.
- Airlines retrench: Major U.S. airlines are slashing summer schedules and retiring aircraft due to lower demand and operational chaos, including air traffic control issues.
- Warning signs ahead: Experts warn the worst may come during the peak summer months, as economic pressures and logistical issues further dampen travel sentiment.
- Brand damage: The U.S. risks losing its status as a top global travel destination as tourists opt for friendlier, easier-entry markets like Mexico and the Caribbean.
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