Monday

07-14-2025 Vol 2021

Impact of the One Big Beautiful Bill Act on U.S. Tourism and Hospitality Industry

The United States is facing significant changes in its tourism landscape following the signing of the One Big Beautiful Bill Act on July 4, 2025, just before the nation’s 250th birthday. This legislation introduces sweeping cuts and policy shifts that are expected to reshape the experiences of international travelers visiting key U.S. cities like New York City, Washington, D.C., and Miami. One of the most prominent features of the bill is an 80% reduction in the advertising budget of Brand USA, the agency responsible for promoting inbound tourism. With its funding slashed from $100 million to just $20 million, the agency’s ability to run large-scale marketing campaigns has been severely compromised. Prior to these cuts, Brand USA’s efforts in 2024 helped attract 1.6 million visitors to the U.S., generating approximately $13 billion for the economy and supporting 80,000 jobs. Without adequate promotion, these numbers are expected to decline, especially affecting cities heavily reliant on international tourism for their economic vitality. Industry leaders like Rosanna Maietta, CEO of the American Hotel & Lodging Association, warn that the boosted tourism numbers seen post-pandemic may diminish as promotion efforts dwindle. This decline is likely to result in lower hotel occupancy, decreased attendance at museums and attractions, and reduced spending in local economies. Fred Dixon, CEO of Brand USA, remains optimistic about the agency’s future prospects, citing upcoming major events such as the 2026 FIFA World Cup and 2028 Olympics as opportunities to bolster inbound travel. However, the reduced marketing budget still poses a threat to effectively drawing international visitors to these events. The legislation also has immediate financial repercussions for the airline industry. Lease fee increases at Washington Dulles and Reagan National airports have led airlines to double their costs, which they will likely pass onto travelers through higher airfare prices. These fare hikes are expected to impact routes beyond D.C., notably affecting connections between Washington, New York, and other major hubs. Higher ticket prices could deter international visitors from flying into these cities, further hurting their tourism industries. Meanwhile, the bill allocates $4.75 billion for overhauling the U.S. air traffic control system. Although these investments won’t deliver instant results, industry experts believe that long-term benefits include fewer delays, enhanced safety, and more efficient air travel. Such improvements could eventually lead to more stable and pleasant travel experiences for passengers, especially in key hubs such as New York and Miami. The hotel industry is bracing itself for diminished overseas demand, which is likely to lead some hotels to raise room rates to compensate for lower occupancy, while others attempt to attract more domestic tourists with special packages and discounts. Reduced foreign visitation will have a ripple effect, impacting employment and wages within the hospitality sector as revenues decline. Major international events such as the 2026 FIFA World Cup and the 2028 Olympics might also face challenges. Limited promotion budgets could result in less global interest and fewer international visitors, potentially affecting ticket sales, hotel bookings, and overall spending during these events. Despite these concerns, some optimism persists that iconic events will still attract domestic spectators and travelers within the country, helping to sustain their economic impact. On the brighter side, domestic tourism is expected to grow as U.S. cities see more local visitors seeking affordable getaways. With reduced foreign tourism, cities like New York, Miami, and Washington D.C. may increasingly rely on staycationers and internal travelers, offering new packages and route adjustments to accommodate changing demand. As the industry adapts to these transformations, American cities will need to respond quickly to emerging trends in tourism. While international visitors may temporarily decline, opportunities for local tourism and exploring the familiar could be beneficial in the long run, fostering a shift in how the U.S. promotes and sustains its tourism industry amidst evolving global conditions.

image source from:travelandtourworld

Abigail Harper