Topline
After two consecutive years of tourism growth in the U.S., a shaky economy—hindered by President Trump’s tariffs—and lower consumer confidence is beginning to impact Americans’ spending on airlines, hotels and other trip components.
Economists are seeing a dip in U.S. travel spending, citing weakening consumer confidence.
Key Facts
In February, U.S. consumer spending on air travel and hotels dropped 10% and 6% year over year, respectively, according to data from Bloomberg Second Measure, with restaurant spending also down 3.5%.
Every week in 2025 through March 24, Americans have spent less on airfares and hotels compared to the same week in 2024, per Bloomberg Second Measure data.
For the year through March 22, credit card receipts showed spending on lodging services and tourism-related services was down about 2.5% compared to last year’s levels, while spending on air travel declined around 6% year over year, according to a report from Bank of America Institute released Monday.
Based on data from 69 million U.S. cardholders, the Bank of America report captures credit card and debit spending at brick-and-mortar businesses more than 500 miles from a cardholder’s home, so it does not capture most drive-market travel that fuels many U.S. destinations’ economies.
Earlier this month, major U.S. airlines cut their forecasts, citing softer demand for domestic air travel and lower consumer confidence amid shaky economic conditions.
Oli Byers, CFO of British carrier Virgin Atlantic told investors, “In the last few weeks, we have started to see some signals that U.S. demand has been slowing,” Reuters reported, with Byers adding that, “We think that is quite a natural reaction to general consumer uncertainty.”
Key Background
Historically, lower consumer confidence leads to a decline of discretionary spending on items like vacations, as Americans cut back on nonessentials. “At the end of the day, the spending you’re going to do on travel is going to be one of the biggest items of spending you do in the year …and also one of the most obvious things you can pull back on if you if you’re concerned about the economy,” David Tinsley, senior economist at Bank of America Institute and the author of its credit card spending report, told Forbes. Economists don’t see this turning around anytime soon. “We think there’s a lot of reasons why what’s happening is likely the start of a trend of weaker consumer spending, particularly on discretionary items,” Scott Hoyt, senior director of economic research at Moody’s Analytics, told Forbes. “Spending growth is slowing and, obviously, when it slows, it always hits discretionary worse.”
Big Number
$1.3 trillion. That’s how much travelers directly spent in the United States in 2024, which produced an economic output of $2.9 trillion and supported more than 15 million American jobs, according to the U.S. Travel Association. As recently as early January, the U.S. Travel Association had projected total U.S. travel spending to grow 3.9% to $1.35 trillion in 2025.
Crucial Quote
“Discretionary spending is in consumers’ crosshairs right now and is going to be weaker going forward,” said Hoyt.
What We Don’t Know
Will this trend worsen as President Donald Trump’s tariffs kick in? “We’re certainly very concerned because we think the drivers are going in a bad direction,” said Hoyt. “The tariffs are going to jack up prices. Consumer confidence is falling. Wealth is no longer rising like it was in the last couple of years.”
Tangent
Inbound travel to the U.S. is also down—but for different reasons. The Trump administration’s tariffs and anti-foreigner rhetoric are turning off international tourists and “setting international travel back several years,” Adam Sacks, president of Tourism Economics, a nonpartisan Oxford Economics company tracking tourism statistics, told Forbes.
Further Reading
Germany And UK Warn Of Travel To US After Reports Of Detentions (Forbes)
Canadian Road Trippers Boycotting U.S. Could Mean A $4 Billion Economic Loss (Forbes)
