Trade Group Says Tourism Downturn Could Hurt US Retail Spending

A downturn in travel could hurt not only the tourism industry in the United States, but also its retailers.

Nearly $20 billion in retail spending is at stake this year, Bloomberg reported Thursday (July 24).

Some travelers are avoiding the U.S. entirely, in many cases due to the President Donald Trump administration’s immigration policies, the report said. Tourists who do come are often recalculating their budgets as inflation increases the cost of hotels and restaurants.

While travel spending typically grows annually, it has remained essentially flat this year, according to the report, which cited data from the U.S. International Trade Administration (ITA). Meanwhile, foreign visitors to the U.S. by air fell 6.6% in June compared to the previous year.

“Tourists would come with empty suitcases, and they would go out, fill the suitcases up and then ship those suitcases home,” said Floris van Dijkum, managing director at financial services firm Ladenburg Thalmann, per the report.

Now, spending habits are changing, and while the “jury is still out on the ultimate impact, … clearly you’re going to see some pressure,” he said, according to the report.

Among the travelers feeling that pressure is Annet van der Meer, who was visiting New York City from the Netherlands. She said that while she’s still shopping with U.S. retailers, most of her vacation budget goes to everyday expenses, the report said.

“Compared with Europe, it’s unbelievable,” said van der Meer, per the report. “Food is very expensive, alcohol is very expensive — I think in Europe we pay two times less than here.”

Meanwhile, U.S. shoppers continue to spend. The latest data on retail spending from the U.S. Census Bureau showed sales up 0.6% from May to June, and 3.9% since June 2024.

“While tariffs have grabbed the headlines — and have caused a great deal of uncertainty — they have not hit the retail sector with full force,” said GlobalData Managing Director Neil Saunders. “Most of this is because the deadlines for tariffs to be imposed have been constantly moved, and most stock being sold in the half was not subject to additional levies. The question … is whether the reasonable first-half performance continues into the second half.