A significant reduction in summer global travel could have advantages for businesses that rely on tourists, said Tarik Dogru, an associate professor at Florida State University’s Dedman College of Hospitality. Fewer U.S. residents are traveling abroad or flying across the country, which means more of their vacation budgets are also staying in the country, Dogru said.
“Current economic and tourism dynamics are likely to redirect spending toward small businesses, such as regional restaurants, local attractions, Airbnb hosts, and roadside businesses along routes that serve close-to-home, budget-conscious travel,” he said.
If the trend continues through the summer and the rest of the year, it could reduce the travel and tourism trade deficit the United States has had since the COVID-19 pandemic. Every year since 2020, Americans spent more on foreign travel than international visitors on travel-related goods and services in the U.S., according to the National Travel and Tourism Office.
Morgan Kain, a teacher in Baltimore, said her family is one of those keeping their travel addiction in check for financial reasons. Kain, her husband, and their three children typically take several trips each summer, including a week-long stay at a lake house in Virginia. Last year they spent six weeks traveling through Italy.
“This summer, we’ll still spend a couple nights at the lake house, but nothing more,” Kain said. “Things are crazy expensive, from travel costs to food and gas costs.”
Tourists make trips within driving distance.
Even though gas costs more than a year ago, 85% of Independence Day week travelers were expected to drive to their destinations, AAA said, noting that car travel remains cheaper than flights for the most part.
Around Lake Tahoe, which straddles California and Nevada, several businesses reported seeing more visitors coming from cities along the West Coast.
Ron Williams, owner of Tahoe Sports, said he was concerned at the beginning of the season that customers weren’t showing up to rent boats and jet skis due to financial concerns. Like the gasoline that powers cars, the price of boat fuel rose during the Iran war.
But so far Williams is “pleasantly surprised with how well the business overall is doing.” Its future bookings are 10% higher compared to the same period last year, it said.
“I think people are probably staying close to home, and being in Lake Tahoe, we have a huge drive-thru market,” Williams said.
Increased demand for the three Lake Tahoe-area rental properties that Jerry Bindel manages for Pyramid Global Hospitality also came as a relief. Ski season reservations dried up along with snow during an unusually warm winter, but “we just saw that change” with the arrival of hiking and boating weather, he said.
Bindel, area general manager of the property management company, said he saw a possible sign that Tahoe visitors were watching their spending: More of them were skipping restaurants and using their rental units’ kitchens or outdoor grills to prepare their own food.
“We’re seeing a lot of additional use of those items this summer,” he said.
Locals still want memorable summer experiences.
In Asheville, North Carolina, small business owners have been hoping for tourism to rebound since Hurricane Helene and flooding from days of torrential rain caused widespread destruction of the city’s landscape, buildings and infrastructure in September 2024.
Aubrey Anderson, owner of a tubing company in Asheville, reduced her summer staff from 100 people to 25 after Helene. After bookings increased earlier this year and she noticed “a lot of new people coming to town,” Anderson felt encouraged enough to hire 50 workers for the current Zen Tubing season.
The unfamiliar faces include hikers who come from South Carolina, Tennessee and other parts of North Carolina to spend several hours floating down the French Broad River for about $30 a person, Anderson said. After tubing, customers from around the region often eat, stop at a brewery, shop or visit other local attractions before heading home, which is “a win for Asheville as a whole,” he said.
“We’re definitely seeing a lot of locals, so to speak,” Anderson said. “People may be skipping the long trip to the beach this year and doing something nearby so they can save a little money and still enjoy a family outing.”
Factory tours offered by French Broad Chocolate have increased this summer, according to Jael Skeffington, CEO and co-founder of the Asheville chocolate maker. Tourists often stop at the local cafe for ice cream or coffee and buy a box of chocolate bars or chocolates before leaving, he said.
“So it’s good for business, but it also seems like what people are looking for is something to do, not just something to eat, but something to experience.” Skeffington said.
Cities are getting a boost from the World Cup
Soccer enthusiasts have flocked to Kansas City, Missouri, like other North American cities hosting World Cup games.
Made in KC, a chain of four cafes and 11 stores that sells locally made sauces, Kansas City-themed gifts and T-shirts to fans of the city’s professional sports teams, has had “really noticeable spikes in traffic” at all of its locations during the tournament, said co-owner Keith Bradley. World Cup-related products, including $40 caps in the colors of this year’s competitors’ teams, have been a big hit, he said.
American tourists from other Midwestern cities (Des Moines and Omaha are a three-hour drive from Kansas City) seem to outnumber American visitors coming from farther away, Bradley said.
“We have a couple of locations in tourist areas of Kansas City… But we also have small stores that are right in suburban neighborhoods in Kansas City, and those have also seen traffic from people going to watch parties during the World Cup, people coming into the city to go to the games, and then tourists just exploring Kansas City on their own.”
Mollie Lothman, co-owner of McLain’s Bakery, a family-owned cafe with five locations, said she believes the cost of food and lodging in Kansas City compared to larger or better-known host cities has helped.
“We’re one of the smaller markets that had the World Cup in Kansas City, but we’re also probably one of the least expensive markets, in terms of family budget, to try to come and experience the World Cup,” Lothman said. “So I think that’s been a big draw for people.”