Monday, July 21, 2025
The U.S. travel industry is struggling in 2025 in a major way, largely due to a sharp decrease in tourism from Canada and an overarching drop in foreign visits. Since the start of the pandemic, thank to the Canadian border closure that started March 2020 visits from Canada are down almost 19% over the same 2024 time period, and all international travel is down 3.4%, reports the U.S. Travel Association. This drastic decrease has also caused travel spending to plummet by a whopping $1.9 billion, a devastating blow to the travel industry within the U.S. sector.
June suffered from the steepest decline as visits from Canada for the month tumbled by 26.4 percent. It is the greatest month-over-month decline the bureau has ever recorded, and it underscores just how much the U.S. travel industry has been beleaguered. However, the overall tumbling has been offset, to some degree, by a surge in Mexican tourists. In both June and the first half of the year Mexican tourism registered impressive growth, with a rise of 14.8% in June and an increase of 12.5% in the first six months. These 940,000 Mexican visitors created close to half a billion dollars in spending, in turn offsetting some of the financial impact from the Canadian decrease.
Despite the challenges, the U.S. Travel Association points out that global travel remains a priority for many, though economic factors are still influencing consumer choices. The data for the first half of 2025 shows that, in general, international tourism to the U.S. is holding steady from most markets, except for Canada. As Canada has long been the largest source of international visitors to the U.S., this downturn is particularly concerning due to its substantial economic impact on the industry.
Leading travel companies, such as Hilton, Wyndham, and Travel and Leisure, are carefully monitoring these shifts, with their upcoming earnings reports likely reflecting the changes in tourism patterns. Las Vegas, in particular, is feeling the effects of reduced international visitation from both Canada and Mexico. This decline in visitors is expected to affect the revenues of major casino and resort chains, including Caesars, MGM, Boyd, and Red Rock Resorts, all of which rely heavily on foreign tourists for a significant portion of their business.
The U.S. travel industry is also grappling with a reduction in funding for international marketing efforts. A recent tax-and-spending overhaul has resulted in significant cuts to the budget for promoting U.S. destinations abroad. These cuts could hinder the country’s ability to attract international visitors, especially as competition from other global destinations intensifies.
In addition, rising visa application fees are adding another layer of difficulty for international travelers. These increases, combined with broader economic uncertainties, are fueling concerns within the tourism industry. The upcoming 2026 FIFA World Cup is a particular point of focus, as higher visa costs and reduced marketing resources may impact the U.S.’s ability to attract tourists for such major events.
U.S. tourism is in a state of half recovery through the first half of 2025. Although Canadian travel suffered a big loss, the rise in Mexicans visiting the U.S. is offering a ray of hope. Yet as visa fees continue to rise, promotional budgets are slashed, and the U.S. economy continues to sputter, the U.S. travel industry can’t simply stand still. It will have to be nimble, however, to remain atop the list of global venues as it alters course in order to offset this headwind and lessen the lasting effects of these obstacles.
