International Tourism and Small Business: The U.S. Can’t Afford to Lose Ground

By SBE Council at 7 February, 2026, 1:52 pm

By Karen Kerrigan –

Last year, international tourism to the United States suffered a hit. Inbound travel spending in 2025  declined for the first time since the pandemic. With many small business owners and their employees counting on strong travel and tourism supported by the flow of international visitors, the current decline in international travel and spending warrant attention. Particularly with excitement and opportunity building around upcoming events such as FIFA World Cup 2026, American 250, World Baseball Classic 2026, Summer Olympics (LA 28), among others. Indeed, travel and tourism are cornerstones of the U.S. economy and small businesses are dominant across the many sectors that benefit from strong and stable activity.

According to the U.S. Travel Association, travel annually generated about $1.3 trillion of spending in the U.S. with international visitors accounting for almost $180 billion (one of America’s biggest exports). International travelers, on average, spend about $4,000 per trip – eight times as much as domestic travelers. Their enthusiasm for the beauty and vibrancy of America supports hotels, restaurants, attraction and tour operators, transportation services, and countless other small businesses located in both urban centers and rural destinations alike.

Similar to almost every industry, the U.S. travel and tourism sectors are dominated by small to mid-sized businesses. Here’s a sampling (2022, latest data available):

The 2025 decline in U.S. inbound travel.

The U.S. Travel Association recently noted that total inbound travel to the U.S. dropped 5.4% in 2025, led by sharp declines in visits from Canada, Germany, and several other European countries – markets that have historically ranked as leading sources for inbound tourism. The decline occurred even as domestic leisure travel remained stable.

The World Travel and Tourism Council (WTTC)  spotlighted the decline in its latest economic impact report. The WTTC found that while global tourism spending increased by 6% in 2025, the decline in the U.S. was an outlier. As Travel Noire observed in an article about the report:

“Globally, more than 1.5 billion tourists spent roughly 11.7 trillion dollars on travel in 2025, and tourism accounted for over 10% of global GDP, yet the U.S. figures ran counter to this overall growth.”

Hitting home. In a recent Fox 29 WFLX.com story, for example, a Ft. Lauderdale hotel manager expressed concern about the noticeable decline in Canadian travelers  – down more than 30% from last year. The manager observed that the falloff impacted the hotel directly “but also all of the beautiful local restaurants nearby and the shops, Las Olas, the Galleria Mall, everyone is affected.” The story also reports on how the Florida real estate market has been affected.

New York City experienced a similar decline – a 5% year-over-year decrease in overseas visitors, with Canadian visitors down 19%. Travelers from major-source markets Germany and France were also down, 10% and 7% respectively. While total tourism, fueled by domestic visitors, may have edged up slightly or stayed robust, the decline in international travel was the main drag on New York City’s overall tourism performance in 2025.

What’s driving the decline? Not surprisingly, cost is the chief deterrent. The complexity and cost of navigating the U.S. visa process on top of fees and other related travel costs present real hurdles for travelers. Moreover, various surveys and trends experts suggest reputational factors, tariff policy, and geopolitical concerns have dampened enthusiasm for visiting the U.S. The combination of issues appears to be pushing international visitors toward markets viewed as less costly, more accessible, and more “welcoming.”

If the U.S. wants to effectively compete for international travelers, then policies and practices must move to lower costs, streamline entry, and make our international friends feel welcome. In a 2023 Travel Pulse Op-ed – “Fixing the U.S. Visa System is an Urgent Priority” – I noted these challenges and the spending losses that result from a clunky, bureaucratic system. With big international sporting events on the calendar, and the upcoming spring and summer travel season quickly approaching, the Trump administration must continue to push forward with policies and processes that will support the expected influx.

Positive steps taken on FIFA 2026. In response to FIFA World Cup 2026, the Trump Administration has implemented the FIFA Priority Appointment Scheduling System, or “FIFA Pass” program to provide ticket holders with expedited visa interview appointments. The State Department announced the hiring of hundreds of new officers to augment consular staffing throughout the world to shorten visa wait times. This is all good news for international travelers excited about the upcoming FIFA matches, as well as host cities like Kansas City, Miami, Boston, New York-New Jersey and others gearing up for the event and working to spotlight and support small businesses to help them benefit from the influx of visitors.

Reform momentum and smart policies can shift the decline trend. As noted above, the impact of declining international tourism falls most heavily on small businesses. More than 90% of employer firms across core travel and tourism sectors have fewer than 100 employees, with many sectors overwhelmingly composed of firms with fewer than 20 workers. When international visits decline, the resulting drop in bookings, foot traffic, and spending is felt by businesses in many sectors and of all sizes. It is felt more immediately and acutely by locally owned businesses that serve as the backbone of visitor-driven economies.

Focus on affordability, ease of entry, less bureaucracy. The slate of upcoming international events and the longstanding attractiveness of America as an international destination have the potential to draw tens of millions of overseas visitors and generate substantial economic activity in the coming year and beyond. The U.S., however, must remain competitive, which means ensuring inbound global travelers feel welcomed and not deterred or financially burdened when they plan their trips. Our elected leaders and policy officials should consider the following:

● Scrap the new $250 Visa Integrity Fee. With this new fee, a U.S. tourist visa would rise from $185 to approximately $435, making it the highest in the world. That’s an expensive upfront cost for a family of four, or a couple, and money that we would like to see spent at a small business.

● Reduce the wait time for Visas. The wait time for a simple interview can stretch for many months in high demand posts. The FIFA Pass model – specifically, shortening wait times – is one that will hopefully extend to inbound travel in general

● Reconsider surveillance overreach and red tape on low-risk, high-spend travelers. Be smart about proposals requiring extensive social media information from all visitors using the Electronic System for Travel Authorization (ESTA), which is used by Visa Waiver Program (VWP) travelers from 42 partner countries. U.S. Customs and Border Protection is proposing that all applicants provide their social media activity for the past five years. Proposed changes to the ESTA application would also add new fields asking for extensive personal information, such as email addresses from the past ten years.

A new study released by WTTC finds that the drop in international visitors due to the new rules (one-third of travelers surveyed said they would be “somewhat or much less likely to visit the US if applicants to the Visa Waiver Program are required to submit information about their social media accounts”) could cost the US. an estimated $15.7 billion in lost visitor spending. According to a CNN report, “Under one scenario, the U.S. could miss out on as many as 4.7 million international arrivals, which would represent a 23% drop in visitors from ESTA countries in 2026.”

● Improve seamless and secure travel. Progress is being made in deploying technology to make the travel experience more seamless and secure, but more work is needed. The Administration and agencies should continue to pursue and implement the smart changes and fixes outlined by the U.S. Travel Association’s Commission on Seamless and Secure Travel.

● Restore Brand USA’s capacity. Costing zero taxpayer dollars, restoration of funds means merely transferring surplus Travel Promotion Fund dollars (from ESTA fees) back to Brand USA. 

America’s travel and tourism sectors help to showcase our nation’s vibrant and beautiful attractions and communities. Entrepreneurial opportunity and success, good jobs, and personal fulfillment are also positive outcomes for many of our fellow citizens who choose this exciting but challenging field. Now is the time for our leaders and policymakers to reinforce this critical industry by helping small businesses, their employees, and local communities prepare and benefit from the big opportunities on the immediate horizon. The U.S. cannot afford to let these opportunities slip away.

Karen Kerrigan is President & CEO of the Small Business & Entrepreneurship Council