{"id":296810,"date":"2025-05-03T15:57:12","date_gmt":"2025-05-03T15:57:12","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/05\/03\/us-to-lose-billions-weakening-travel-demand-could-cost-economy-warn-analysts-times-of-india\/"},"modified":"2025-05-03T15:57:12","modified_gmt":"2025-05-03T15:57:12","slug":"us-to-lose-billions-weakening-travel-demand-could-cost-economy-warn-analysts-times-of-india","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2025\/05\/03\/us-to-lose-billions-weakening-travel-demand-could-cost-economy-warn-analysts-times-of-india\/","title":{"rendered":"US to lose billions? Weakening travel demand could cost economy, warn analysts – Times of India"},"content":{"rendered":"
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Declining travel demand<\/a>, evidenced by disappointing earnings projections from major travel companies, could lead to significant economic losses for the US this year. Analysts point to the impact of the Trump administration’s trade policies on consumer confidence, as reported by Reuters.
JP Morgan<\/a> claimed in a recent note that rising anti-American sentiment may be contributing to a decline in international tourism, which is a key service export. Both Goldman Sachs and JP Morgan estimate that reduced foreign travel expenditure could lower US GDP by 0.1 per cent this year, with potential impacts reaching 0.2 to 0.3 per cent.
LSEG analytics data shows that US GDP reached $23.53 trillion in the first quarter of 2025, suggesting that the losses could range from $23 billion to $71 billion, based on Reuters’ calculations.
Delta Air Lines reported last month that travel demand has “largely stalled” and abandoned its annual projections. Southwest Airlines, American Airlines, Alaska Air, and Frontier all withdrew their guidance, while United Airlines issued two separate forecasts, as trade tensions create unprecedented uncertainty, similar to the post-Covid-19 conditions.
Airbnb projected second-quarter revenue below market expectations, and Hilton noted that travelers were adopting a “wait-and-see” approach. Goldman Sachs, in a March report, attributed reduced European travel bookings to tariff announcements and a more aggressive stance toward historical US allies, contributing to global unease about the US. The decline in international tourism has been particularly impactful.
Also read: India may gain as US-China trade tensions push automakers to diversify, claims report<\/a>
Trump’s inconsistent tariff policies have led global consumers to avoid US products and brands. In 2024, foreign traveler spending accounted for 0.7 per cent, or $215 billion, of US GDP, according to J.P. Morgan estimates. A 10 per cent reduction in spending directly impacts US GDP by 7 basis points, the firm added.
Americans, meanwhile, are showing caution in discretionary spending due to budget constraints and concerns about a potential recession, exacerbated by ongoing trade policy uncertainties.
In 2023, the US travel and tourism sector<\/a> represented about 3 per cent of GDP and supported more than six million jobs, according to Bureau of Economic Analysis data. After a strong performance in 2023 and 2024, Bank of America-aggregated card data shows a marked reduction in spending on lodging, tourism, and airlines in the week ending March 22.
Recent data revealed the US economy’s first contraction in three years during the first quarter, and April saw continued weak consumer sentiment.
Also read: Warren Buffett warns US against weaponizing trade at 2025 Berkshire AGM<\/a><\/div>\n