Canada, France, UK, Australia, Germany, Norway, Ireland, and Netherlands Slash Travel to the US as Political Turmoil and Economic Pressures Trigger Airline Recession and Domestic Tourism Cutbacks: New Report You Need to Know - Travel And Tour World (2025)

Saturday, April 26, 2025

In 2025, the US faces a sharp decline in international tourism as major countries including Canada, France, UK, Australia, Germany, Norway, Ireland, and Netherlands dramatically slash travel plans to America. Triggered by escalating political turmoil, rising costs, and a growing sense of hostility toward visitors, this downturn is now fueling a full-blown airline recession and forcing U.S. domestic travelers to cut back amid economic uncertainty. A new report highlights how these intertwined political and financial pressures are reshaping the future of U.S. tourism at every level.

The U.S. tourism industry is facing a turbulent storm in 2025, as political turmoil and growing economic pressures deter international visitors and weigh heavily on domestic travelers. A new report by Tourism Economics reveals that a major shift is underway: travelers from key markets including Canada, France, the United Kingdom, Germany, Norway, Ireland, the Netherlands, and Australia are drastically cutting back on trips to the United States, triggering a cascading effect throughout the airline and hospitality sectors.

This sweeping downturn comes at a time when the U.S. economy is grappling with inflation, rising tariffs, and political tensions that are reshaping how both international and domestic tourists view travel to the country. As these pressures mount, experts warn that the American tourism industry is already plunging into recession territory, with airlines particularly hard hit.

International Tourism to the U.S. Drops as Political Hostility Escalates

Political uncertainty has become a leading factor in the dramatic decline of overseas travelers visiting the U.S. According to the latest data, international arrivals are projected to fall by 9% in 2025, representing an eye-watering loss of nearly $9 billion in tourism revenue.

Many international travelers now perceive the U.S. as an increasingly hostile environment. Heightened detentions, deportations, and sweeping security measures are contributing to this perception, fueling caution among tourists. In an unprecedented move, Canadian companies are advising executives to travel with burner phones instead of their personal devices when visiting the United States. This precaution underscores a broader sentiment of distrust and unease among travelers.

Additionally, several nations—France, Canada, Denmark, Germany, Norway, Ireland, the Netherlands, and the UK—have issued updated travel advisories, warning their citizens about the risks of visiting America.

The impact is already visible:

• Canada, historically the largest source of international visitors to the U.S., is pulling back sharply. Analysts predict 4 million fewer Canadians will travel to the U.S. in 2025. This could drain more than $20 billion from tourism-heavy states like Florida, Arizona, and California.
• France is witnessing similar declines. French travel agencies report a 20% drop in U.S. bookings, while hotel giant Accor SA notes a 25% dip in European summer travel plans to the U.S.
• The United Kingdom and Germany are also reporting noticeable declines in travel demand, citing political instability and rising costs as primary concerns.

Bloomberg aptly captured the mood, stating there has “never been a better time to be anti-American,” as sentiments in traditional U.S.-friendly nations turn increasingly wary.

Economic Pressures Intensify Travel Slowdown

Even as political tensions flare, economic realities are compounding the U.S. travel crisis. Inflation, job insecurity, and rising costs are prompting consumers on both sides of the Atlantic to reconsider their travel budgets.

Within the U.S., consumer sentiment dropped by 8% between March and April, according to a survey by the University of Michigan, signaling that Americans themselves are growing increasingly cautious with discretionary spending.

Travel costs are soaring: the average vacation is expected to cost $7,249 in 2025, reflecting a 24% increase from the previous year. Groceries alone are 23% more expensive compared to 2021, pushing basic trip expenses even higher.

International travelers have noticed the change, too. French tourists, for instance, are adapting by shortening their U.S. stays, using home-exchange platforms, loading up on breakfast buffets, and relying on takeaway food to manage skyrocketing prices.

Australian travelers are no exception. With Trump-era tariffs still impacting global prices and a weaker Australian dollar exacerbating exchange rates, fewer Australians are venturing to the U.S., preferring closer, more affordable alternatives in Asia or Europe.

Squaremouth Insurance forecasts that vacation costs will continue to climb, making U.S. trips less attractive for the budget-conscious global traveler.

Domestic Travelers Cut Back on Spending

Domestic tourism is also taking a hit. Fears of job losses, recession signals, and shrinking 401(k) portfolios are prompting American travelers to tighten their belts.

Recent data reveals:

• Air travel spending by U.S. consumers has dropped by 10% year-on-year in 2025.
• Hotel spending is down 6% compared to 2024.
• Convenience store sales—often a reflection of road trip and leisure travel activity—fell 4.3% in early 2025 as Americans cut back on spending for small luxuries like snacks.

Rakuten’s survey found that 56% of Americans are opting for “dealcations”—waiting until the last minute to book cheap destinations where discounts are highest. The trend is even stronger among millennials, with 80% delaying travel plans until they find the best deals.

Additionally, one-third of U.S. consumers surveyed by MMGY plan to stay closer to home in 2025, while nearly another third plan to shift from international trips to domestic getaways.

Airlines Enter Recession Mode

The tourism slump is being felt acutely in the airline industry. CEOs of major carriers including Southwest, American Airlines, and Delta have sounded the alarm, citing falling demand and escalating economic pressures.

• Southwest Airlines’ CEO Bob Jordan recently declared that domestic leisure travel has dropped to a level not seen outside of the pandemic, and that the airline sector has already entered a recession.
• Across the Atlantic, major European airlines like IAG, Air France-KLM, and Lufthansa are also suffering, with share prices tumbling on tariff-related news.
• Airlines have had to pull forward forecasts and reevaluate summer schedules amid weak demand signals.

The situation is exacerbated by fluctuating markets. In early April, U.S. stock markets recorded their worst day in nearly five years, with over $1 trillion in losses. With retirement accounts and investment portfolios shrinking, consumer confidence in discretionary travel spending is plummeting.

Luxury Travel Remains a Rare Bright Spot

While middle-class and budget travelers tighten their belts, luxury travel remains resilient.

First-class cabins are being reimagined to lure wealthy travelers who might otherwise charter private jets. Airlines such as Air France, Qantas, and Cathay Pacific are investing heavily in ultra-premium upgrades—targeting VIPs who, driven by ecological guilt or cost-consciousness, are opting to “buy out” entire first-class sections for privacy rather than leasing a private aircraft.

Thus, while the mass tourism market contracts, the top 1% continues to travel with few restrictions, buoying a small but vital segment of the airline and hotel industries.

Major countries including Canada, France, UK, Australia, Germany, Norway, Ireland, and Netherlands are slashing travel to the U.S. as political turmoil and soaring economic pressures trigger a sharp decline in international visitors, a looming airline recession, and deep domestic tourism cutbacks, according to a new report.

A New Era for U.S. Tourism

Political upheaval, protectionist policies, rising tariffs, and inflationary pressures are driving seismic shifts across the U.S. travel landscape. Key markets like Canada, France, the UK, Germany, Norway, Ireland, the Netherlands, and Australia are slashing their travel to the U.S., while at home, Americans are pulling back sharply on discretionary travel spending.

The airline industry is reeling from what some CEOs are openly calling a recession, and the tourism sector must now grapple with the reality of a reshaped, leaner market. As budget travelers vanish, luxury tourism remains the outlier—highlighting a travel industry increasingly divided along economic lines.

The coming months will test the resilience of U.S. tourism more than at any time since the pandemic, as political and economic forces continue to reshape who travels, where, and why.