The U.S. Travel & Tourism Sector: A Global Powerhouse

The U.S. Travel & Tourism sector has long been a cornerstone of the national economy, consistently ranking as the world’s largest in terms of economic contribution. According to the WTTC’s 2024 Economic Impact Trends Report, the sector contributed $2.36 trillion to the U.S. economy in 2023, supporting over 27 million jobs and accounting for a significant portion of federal, state, and local tax revenues. This figure marked a record-breaking performance, surpassing pre-pandemic levels and highlighting the sector’s resilience despite global economic uncertainties.

In 2024, the WTTC projected that global travel and tourism would contribute $11.1 trillion to the world economy, with the U.S. leading due to its robust domestic travel market. Domestic tourism accounted for nearly 90% of U.S. tourism spending in 2024, driven by Americans traveling in record numbers within the country. This reliance on domestic travelers has been a double-edged sword: it sustained the sector during the pandemic, but it masks vulnerabilities in the international market, where the U.S. is losing ground.

Recent WTTC Findings: A Shift in 2025 Projections

Contrary to the idea of the U.S. sector exceeding previous records in 2025, recent WTTC reports paint a more cautious picture. A May 2025 study by WTTC and Oxford Economics forecasted a $12.5 billion decline in international visitor spending for 2025, making the U.S. the only country among 184 economies analyzed to face such a drop. This decline is attributed to several factors, including restrictive immigration policies under the Trump administration and a lack of bold strategies to attract international tourists.

WTTC President and CEO Julia Simpson emphasized the severity of this trend, stating, “The U.S. travel and tourism sector is the biggest globally, worth almost $2.6 trillion, but without urgent action to restore international traveler confidence, it could take years to return to pre-pandemic levels of international visitor spend.” This warning underscores a critical challenge: while the sector remains a global leader, its growth is stunted by over-reliance on domestic tourism and declining international appeal.

Economic Impact and Job Creation

Despite the projected international spending decline, the U.S. Travel & Tourism sector’s overall economic impact remains substantial. In 2024, it contributed $2.6 trillion to the economy, supported over 20 million jobs, and generated more than $585 billion in tax revenue, accounting for nearly 7% of all government income. These figures highlight the sector’s role as an economic powerhouse, driving growth across industries like hospitality, aviation, and retail.

The sector’s job creation is particularly notable. In 2024, it supported 27 million jobs in the U.S., with 1 million job openings in the leisure and hospitality industry alone. The WTTC projects that global travel and tourism will create 13.6 million jobs in 2024 compared to 2019, with the U.S. leading in business travel recovery. Business travel spending in the U.S. was projected to surpass 2019 levels by 13.4% in 2024, reaching $1.5 trillion globally, with the U.S. as the top contributor.

Domestic Strength vs. International Weakness

The U.S. tourism sector’s strength lies in its domestic market. In 2024, Americans’ preference for domestic travel fueled record-breaking spending, particularly in destinations like Disney World, Yellowstone, and emerging regions like San Luis Obispo, California. This domestic focus was a lifeline during the pandemic, when international travel restrictions limited inbound tourism. However, the WTTC warns that this heavy reliance on domestic travelers is a vulnerability.

International tourism, where high-spending visitors drive significant economic impact, is critical for sustained growth. The projected $12.5 billion loss in international visitor spending in 2025 is a red flag. The WTTC notes that the U.S. is “losing its crown” as the world’s top destination for international travelers, with countries like China expected to overtake the U.S. as the largest travel and tourism market within five to six years. Factors contributing to this decline include:

1. Immigration Policies: The Trump administration’s crackdown on immigration has been cited as a deterrent for international tourists, creating a perception of the U.S. as less welcoming.
2. Lack of International Recovery Plan: Unlike other countries investing in tourism promotion, the U.S. lacks a robust strategy to attract international visitors.
3. Outbound Travel Surge: U.S. citizens are traveling abroad in greater numbers, further reducing domestic tourism revenue from international sources.

Comparative Global Context

Globally, the travel and tourism sector is experiencing robust growth. The WTTC’s 2025 Economic Impact Research projects that global tourism will contribute $16.5 trillion to the world economy by 2034, accounting for 11.5% of global GDP. In 2024, the sector contributed $10.9 trillion globally, a 6% increase over 2019, with 357 million jobs worldwide.

Other countries are outperforming the U.S. in international tourism growth:

• Japan: In 2024, Japan’s tourism sector was set to break records, driven by a favorable exchange rate and sustainable tourism initiatives. By 2034, it’s projected to contribute ¥48.64 trillion to GDP.
• India: India’s tourism sector is expected to grow 7% over the next decade, contributing $230 billion to the economy in 2024 and aiming for 10% of GDP.
• Europe: The European tourism sector is projected to generate €2.3 trillion in GDP by 2035, creating 4.5 million jobs.
• China: Chinese outbound tourism is surging, with the country expected to surpass the U.S. as the largest travel market within a decade.

In contrast, the U.S.’s projected decline in international spending sets it apart negatively. The WTTC argues that without policy changes, the U.S. risks falling further behind.

Challenges and Policy Recommendations

The WTTC and industry experts have identified several challenges facing the U.S. Travel & Tourism sector:

• Perception Issues: Immigration policies and geopolitical tensions may deter international visitors, who perceive the U.S. as less accessible.
• Underinvestment in Promotion: Unlike countries like Japan and India, the U.S. has not prioritized tourism marketing to international audiences.
• Economic Competition: Emerging markets like India and established ones like China are aggressively attracting international tourists, diverting spending from the U.S.

To address these challenges, the WTTC recommends:

1. Government Support: Federal policies should prioritize tourism as a driver of economic growth, including streamlined visa processes and marketing campaigns to attract international visitors.
2. Public-Private Partnerships: Collaboration between government and private sectors, like those seen in Brazil’s partnership with WTTC, could enhance tourism infrastructure and sustainability.
3. Sustainable Practices: Investing in eco-tourism and lesser-known destinations could diversify the U.S. tourism portfolio, reducing congestion in popular areas.
4. Digital Innovation: Leveraging technology, as seen in partnerships with companies like Google and IBM in other regions, could improve traveler experiences and marketing.

Opportunities for Growth

Despite the challenges, the U.S. Travel & Tourism sector has significant growth potential:

• Business Travel Recovery: The U.S. leads in business travel spending, which is 13.4% above 2019 levels. This trend could be leveraged to attract high-spending corporate travelers.
• Emerging Destinations: Promoting lesser-known destinations like San Luis Obispo or Wrexham, Wales, could draw international visitors seeking unique experiences.
• Cultural and Eco-Tourism: The U.S.’s diverse landscapes and cultural heritage offer opportunities to tap into the growing demand for sustainable and experiential travel.
• Global Events: Hosting events like the WTTC Global Summit, as Rome will in 2025, could boost the U.S.’s visibility as a tourism leader.

Critical Perspective

While the WTTC’s data is authoritative, it’s worth examining its projections critically. The organization represents private-sector interests, which may influence its emphasis on government intervention and international tourism. The $12.5 billion projected loss in 2025 is significant but represents a small fraction of the sector’s $2.6 trillion contribution. Moreover, the focus on international spending may downplay the resilience of domestic tourism, which has sustained the sector’s growth.

The narrative of U.S. decline also contrasts with earlier 2024 reports celebrating record-breaking performance. This discrepancy suggests that while international tourism is a concern, the sector’s overall health remains strong. Policymakers should balance the need for international recovery with continued investment in domestic tourism, which has proven reliable.

Conclusion

The U.S. Travel & Tourism sector remains the world’s largest, with a $2.6 trillion economic contribution and over 20 million jobs supported in 2024. However, the WTTC’s 2025 projections highlight a critical challenge: a $12.5 billion decline in international visitor spending, driven by policy barriers and a lack of strategic focus on global tourism. While domestic tourism has fueled record-breaking performance, the sector risks stagnation without efforts to restore international traveler confidence.

By adopting WTTC’s recommendations—government support, sustainable practices, and digital innovation—the U.S. can maintain its global leadership. Leveraging its strengths in business travel, cultural diversity, and emerging destinations will be key to exceeding previous records in the future. For now, the sector’s outlook is one of cautious optimism, balancing domestic resilience with the urgent need for international recovery.