While Americans are traveling abroad in record numbers, the United States is facing a concerning decline in international visitors, and the economic consequences could be severe.

According to recent data, inbound international tourism to the U.S. is down 10% year-over-year, with inbound visitors falling 14% in March alone. Meanwhile, Americans are setting new records for overseas travel, with outbound international flights up 1.6% from last March and 22% higher than pre-pandemic levels in 2019. All of this has created a growing imbalance between what international tourists spend in the United States and what Americans are spending abroad.

The U.S. travel industry generates about $1 trillion annually, and tourism is one of the country’s largest service exports. But with international visitor spending slipping, the United States is now facing a tourism trade gap of more than $50 billion. If current trends continue, the United States could lose up to $21 billion in travel export revenue this year, according to the U.S. Travel Association.

At IMPLAN, we dug deeper to understand the broader economic ripple effects of this downturn using our data and modeling platform. Our estimates show that a $21 billion reduction in international visitor spending would:

• Reduce U.S. GDP by $23.17 billion
  
  
• Eliminate 230,645 jobs
  
  
• Cut labor income by $13.25 billion
  

Which Industries Are Most Affected?

Tourism-related sectors like lodging, dining, and entertainment are among the most directly impacted. These industries also have higher-than-average labor intensity, meaning they employ more workers per dollar of output compared to many other sectors. When demand drops, job losses follow quickly.

Here are some of the hardest-hit sectors based on IMPLAN’s impact analysis:

Employment losses would extend beyond core tourism sectors. Downstream impacts would hit industries such as advertising and PR, real estate, energy utilities, banking, and even healthcare and education services. These losses reflect the indirect and induced effects of reduced tourist spending, which travels through local supply chains and households.

Local Multiplier Effects Matter

“The top expenditure categories of tourists from abroad are lodging, dining, entertainment and recreation, auto rental, and retail services (including gas stations),” explains IMPLAN Economist Jenny Montell, Ph,D. “These industries all have higher-than-average labor intensities, such that when demand falls, labor can be expected to fall at a higher-than-average rate.”

She also notes the significance of domestic sourcing: “Nine of the hotel and motel industry’s top 10 inputs are sourced almost entirely within the U.S., including services like food and beverage, advertising, and banking. That means when these industries lose demand, the hit reverberates across many other U.S.-based businesses.”

Why This Matters for Policy and Planning

For states and regions that rely heavily on international tourism, such as California, Florida, New York, and Nevada, understanding these potential economic losses is critical. Local leaders, economic development organizations, and destination marketers can use this kind of impact modeling to:

• Quantify losses and make the case for support or policy intervention
  
  
• Strategize efforts to boost inbound tourism and diversify visitor markets
  
  
• Prioritize marketing and infrastructure investments with the greatest local return

While the U.S. Travel Association is projecting a rebound in international visitor spending in 2025 (with an estimated 12%+ increase), near-term declines still pose real risks to local economies and workers across the country.

Want to explore the full industry-level impact data or model the effects in your state or region? Contact us to get started.