The U.S. tourism industry is facing a sharp slowdown in 2025. According to the World Travel & Tourism Council, the country could lose up to $12.5 billion in international travel spending this year (a 22.5% drop from its previous peak).
That’s not just bad news for airlines and hotels. It’s a hit to the broader economy, affecting millions of jobs, community tax revenues, and, perhaps surprisingly, your retirement savings.
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Whether you’re close to retirement or just getting started, here’s why the tourism slump matters and what you can do right now to protect your financial future.
“A decline in tourism affects employment because the sector provides nearly 20 million jobs across the U.S.,” says Yehuda Tropper, CEO of Beca Life Settlements. “Additionally, when fewer tourists visit, localities receive fewer sales and hospitality tax dollars. This is especially impactful in states without a state income tax, because they rely on sales and other taxes to make up the government revenues they don’t receive through state income taxes. Some of the no-income tax states are ones with high numbers of seniors, such as Florida and Texas.
“Regional economic downturns have multiple impacts on retirement savings, including the credit quality of municipal bonds, and they can also spread out to become national downturns.”
Tropper points to the Great Recession as an example, where a housing-market collapse in certain states eventually triggered a broader crisis.
He also notes that “weakness in tourism spending signals overall broader economic weakness, as consumers prioritize essential bills like housing, utilities, transportation, and healthcare over discretionary expenses like travel.”
That shift, he said, can impact mutual funds, ETFs and dividend stocks, all common holdings for retirees and near-retirees.
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Check whether your investments are too concentrated in sectors affected by the slump, such as airlines, hotels or cruise lines. Rebalancing toward more stable sectors like healthcare, utilities or consumer staples can help reduce risk.
Yehuda Tropper, CEO of Beca Life Settlements, suggests that retirees and near-retirees “consider rebalancing their portfolios to make sure they’re diversified in a way that includes sectors less correlated with tourism and discretionary spending.”
