The U.S. tourism industry is facing a sharp slowdown in 2025. According to the World Travel & Tourism Council, the country could lose up to $12.5 billion in international travel spending this year (a 22.5% drop from its previous peak).
That’s not just bad news for airlines and hotels. It’s a hit to the broader economy, affecting millions of jobs, community tax revenues, and, perhaps surprisingly, your retirement savings .
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Whether you’re close to retirement or just getting started, here’s why the tourism slump matters and what you can do right now to protect your financial future .
How a Tourism Slump Can Impact Your Retirement
“A decline in tourism affects employment because the sector provides nearly 20 million jobs across the U.S.,” says Yehuda Tropper, CEO of Beca Life Settlements. “Additionally, when fewer tourists visit, localities receive fewer sales and hospitality tax dollars. This is especially impactful in states without a state income tax, because they rely on sales and other taxes to make up the government revenues they don’t receive through state income taxes. Some of the no-income tax states are ones with high numbers of seniors, such as Florida and Texas.
“Regional economic downturns have multiple impacts on retirement savings, including the credit quality of municipal bonds, and they can also spread out to become national downturns.”
Tropper points to the Great Recession as an example, where a housing-market collapse in certain states eventually triggered a broader crisis.
He also notes that “weakness in tourism spending signals overall broader economic weakness, as consumers prioritize essential bills like housing, utilities, transportation, and healthcare over discretionary expenses like travel.”
That shift, he said, can impact mutual funds, ETFs and dividend stocks, all common holdings for retirees and near-retirees.
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4 Things You Can Do Now
1. Rebalance Your Portfolio
Check whether your investments are too concentrated in sectors affected by the slump, such as airlines, hotels or cruise lines. Rebalancing toward more stable sectors like healthcare, utilities or consumer staples can help reduce risk.
Yehuda Tropper, CEO of Beca Life Settlements, suggests that retirees and near-retirees “consider rebalancing their portfolios to make sure they’re diversified in a way that includes sectors less correlated with tourism and discretionary spending.”
With longer life expectancies, he notes, well-diversified portfolios have time to recover from short-term cycles like these. Many retirement accounts allow you to adjust your allocations online or through your plan administrator.
2. Don’t Panic-Sell
A tourism slump isn’t the same as a market crash. If you’re decades away from retirement, sticking to your investment strategy is often better than reacting emotionally to short-term headlines. Selling now can lock in losses, while staying invested gives your portfolio time to recover.
Oppenheimer Asset Management advises that “reacting to short-term market fluctuations can often lead to costly mistakes.”
Your 401(k) plan is designed for the long haul, and pulling out during temporary turbulence could derail your long-term goals.
3. Use the Dip to Your Advantage
If you’re in the accumulation phase of retirement saving, a tourism-linked downturn may present a buying opportunity . Contributing regularly during a market dip means you’re buying more shares at lower prices, a strategy known as dollar-cost averaging. It’s a long-term play, but it works in your favour over time.
Dollar-cost averaging involves investing a fixed amount at regular intervals regardless of market conditions and is championed for its disciplined approach and effectiveness in mitigating emotional biases.
4. Strengthen Your Cash Reserves
If you’re closer to retirement or already withdrawing from your accounts, make sure you have an adequate emergency fund or short-term cash reserve. This helps you avoid tapping into your retirement investments during a dip, which can lead to permanent losses. A good rule of thumb is to keep six to 12 months of expenses in a liquid, low-risk account.
Personal finance expert Suze Orman proposes that retirees maintain a “just-in-case” fund of three to five years’ worth of expenses in a liquid, non-market-tied account like a money-market fund or CDs. Her reasoning is based on the potential for market downturns, which can take several years to recover, during which retirees may need to avoid liquidating investments at a loss.
Final Takeaway
The 2025 tourism slump may not make daily headlines, but its ripple effects could quietly erode your retirement savings if you’re not paying attention. By reviewing your investments, staying disciplined and making small adjustments now, you can keep your long-term financial goals on track no matter what’s happening in the travel industry.
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This article originally appeared on GOBankingRates.com : The 2025 US Tourism Slump Could Hurt Your Retirement Savings: 4 Things To Do Now