U.S.

Policy Missteps Fuel a “Self‑Inflicted” Hit to U.S. Tourism Economy

Business owners in gateway cities warn that avoidable policy choices — from visa backlogs to mixed messaging on entry rules — are deterring international visitors and deepening economic pain for low‑wage workers. The decline reverberates beyond souvenir shops, shrinking tax revenue, straining public services and exposing inequities in who bears the losses.

Lisa Park3 min read
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Policy Missteps Fuel a “Self‑Inflicted” Hit to U.S. Tourism Economy
Policy Missteps Fuel a “Self‑Inflicted” Hit to U.S. Tourism Economy

Tourists once packed the sidewalks of downtown Washington, D.C., flowing into gift shops, museums and late‑night restaurants. This year, foot traffic is thinner and spending is softer — in ways local proprietors and industry groups describe as a "self‑inflicted injury" driven by government policies and administrative failures rather than global demand.

Mike Mondello, owner of the Made in Washington stores that sell souvenir T‑shirts and locally themed gifts near the National Mall, said sales that used to spiral in summer months have not returned to pre‑pandemic tempos. "We’re not seeing the steady stream of international groups we used to rely on," he said. "People are canceling trips or choosing other capitals that make it easier for visitors to get here." Mondello tied many of the lost customers to slow visa processing and unclear entry requirements that add cost and uncertainty to overseas travel plans.

Travel industry officials echo the assessment. A spokesperson for the U.S. Travel Association said the United States is underperforming relative to competing destinations because of frictions at the border, backlogs at embassies, and a lack of coordinated federal marketing to reassure international travelers. "These are avoidable barriers," the spokesperson said. "When countries streamline visas and clear rules, tourists come. When the U.S. does not, those travelers go elsewhere."

The effects are most acute among hourly workers, small business owners and neighborhoods dependent on visitor spending. Local servers, taxi drivers, tour guides and souvenir clerks — jobs often held by immigrants and people of color — have seen erratic hours and reduced tips. Municipalities that rely on sales and hotel taxes to fund public health clinics, sanitation and transit face tighter budgets as tourist revenue softens.

Public health experts say weakened tourism undermines services that support community well‑being. "When cities lose a predictable revenue stream, preventive and primary care, which already compete for scarce funds, can be the first to feel cuts," said a public health policy analyst at a nonprofit research institute. Those services are pivotal for low‑income communities that lack private access to care.

Policy options touted by the industry are straightforward: expand consular capacity to reduce visa wait times, harmonize entry protocols with clear communication, and invest in targeted international marketing. Advocates also call for relief for small businesses and workers — from rental assistance to emergency employment programs — to blunt immediate harms.

Critics argue that the federal government has been slow to treat tourism as an economic priority. "Tourism isn’t frivolous; it’s a jobs‑and‑services engine," said an economic development official in a major gateway city. "Failing to remove avoidable barriers is choosing to cede ground to competitors."

For shop owners such as Mondello, fixes cannot come soon enough. "We want travelers to see the best of America," he said. "If the policies at home make them hesitate, we lose more than a sale — we lose livelihoods and the chance to build international connections."

As policymakers debate budget priorities and border policies in the months ahead, the tourism sector is pressing for concrete, equity‑focused steps that would restore visitors and shore up the low‑wage workforce that has borne much of the fallout. Without such action, industry and community leaders warn, the "self‑inflicted" setback could harden into a longer‑term drag on cities already struggling to recover.

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