International visitors to the United States fell 4.2% in 2025, the first annual decline since the pandemic, while worldwide travel grew about 4%. The spending moved elsewhere, and the US tourism reallocation is an opening for the destinations positioned to receive it.
On the US Travel Association’s full-year basis, inbound visits fell 5.5% to 68.3 million, against 72.3 million in 2024 and 79 million in 2019. Inbound spending fell to US$175bn, some 18% below 2019 once adjusted for inflation. Living Lab had forecast a 9% rise in US international arrivals for 2025. We revised to a 9.4% decline, one of the sharpest single-year corrections in the platform’s history. We say so because clients can plan on a forecast that is tested in public.
The causes were policy: visa issuance suspended to 75 countries, border device searches up 18%, tariff measures weighing on sentiment. Western European overnight visits fell 17% in March alone, and Canadian arrivals fell by more than a fifth. A traveller forms intent six to eighteen months out, which is the lead time the receiving destinations now have.
The demand has not come back even under the strongest incentives, so we treat it as the new normal.
Living Lab’s displacement model puts the forgone US spending at roughly US$50bn and traces most of it to five economies: Saudi Arabia, the UAE, Qatar, Mexico, and Canada. Each absorbed a different segment for a different reason. Each can grow its share by lifting a different constraint: facilities, hotel headroom, calendar size, security perception, or long-haul air access beyond the gateways. About US$10.6bn of the total is contestable between them, and Qatar stands to gain most as a share of its base.
The 2026 World Cup, the largest sporting event ever held on US soil, had ticket demand at 30 times capacity and did not reverse the decline. US inbound arrivals kept falling through the tournament window.
The paper sets out three things a destination can plan on: the segment it can capture, the constraint that caps it and what relieving it returns. The full paper is in the white papers. The forecasting method is on the page for demand forecasting, and the route implications on aviation and route development.
If your destination is receiving displaced US demand, treat it as a baseline to build on. Name the segment, name the constraint that caps how much you can take, and cost its relief. The destination that lifts the constraint keeps the demand when the market settles.
A hotel pipeline decision is usually made on an occupancy trend, extrapolated forward. That answers a different question from the one a planner, a developer, or an investor faces: is the market short of rooms overall, or short of rooms on the 18 nights a year when demand peaks?
A new route photographs well on launch day. Whether it is still flying in year three, without deep discounting, and still worth the airport incentive that started it, is a quieter question, and it is the one that comes up at renewal.
International visitors to the United States fell 4.2% in 2025, the first annual decline since the pandemic, while worldwide travel grew. The spending did not disappear. It moved. Five economies are absorbing most of it, and the shift now looks structural.
Oman has announced plans for a high-altitude destination at Jabal al Akhdar, combining sports training, wellness, and tourism at 2,400 metres. It is the kind of project a Gulf government can commit to at once, and the kind that lives or dies on a demand case nobody has yet published.
International arrivals to the United States fell 4.2% in 2025 while worldwide travel grew about 4%. Living Lab’s displacement model puts the forgone spending at roughly US$50bn, and about US$10.6bn of it within reach of five economies. Each is limited by a different constraint.
Most destinations run near capacity for part of the year and well below it for the rest. A visitor added in the peak displaces one already there. A visitor added in the shoulder fills an empty room and is served by staff who would otherwise be idle. Almost no destination runs the calculation before fixing a date.
