U.S. Faces Potential Billions In Economic Loss As Travel Demand Weakens

Weakening demand for travel could cost the U.S. economy tens of billions of dollars this year, as concerns over the Trump administration’s trade policies weigh heavily on consumer and investor sentiment, analysts have warned, according to a Reuters report.

With first-quarter GDP standing at $23.53 trillion, the projected economic impact could range from $23 billion to $71 billion.

“Anti-American sentiment could be driving a decline in international tourism, which is considered a service export,” J.P. Morgan noted in a recent analysis.

Both J.P. Morgan and Goldman Sachs estimate that the slump in foreign travel spending could shave 0.1% off U.S. GDP in 2025—with losses potentially reaching as high as 0.3%.

With first-quarter GDP standing at $23.53 trillion, the projected economic impact could range from $23 billion to $71 billion.

Delta Air Lines recently announced that international travel demand has “largely stalled,” prompting it to scrap its annual forecast. Other major U.S. airlines—Southwest, American, Alaska Air, and Frontier—also pulled their guidance.

Meanwhile, United Airlines issued two different outlooks due to mounting uncertainty tied to the ongoing trade war.

Industry experts say the disruption marks the biggest challenge for the airline sector since the COVID-19 pandemic.