US Tourism Faces Sharp Drop In International Arrivals, Even As Global Travel Experiences Record Growth

Global tourism is on an upward trajectory, driven by increased international spending and growing traveler numbers across popular destinations. However, the US is facing a decline in international arrivals, largely due to lingering effects of past policies, visa restrictions, and shifting travel preferences. While many countries are experiencing record tourism growth, factors like geopolitical tensions and operational challenges have significantly impacted the US travel sector, resulting in a notable downturn in foreign visitor numbers. This contrast highlights the resilience of global tourism, even as the US struggles to maintain its competitive edge.

Tourism is proving its resilience in the face of mounting global challenges, offering new opportunities for the travel retail drinks industry. Despite ongoing geopolitical tensions, increasing operational costs, and the growing effects of climate change, 2025 is shaping up to be a promising year for global tourism markets. This resilience is providing a boost to the travel retail sector, especially in the drinks market, which continues to thrive even amidst uncertainty.

According to the World Travel & Tourism Council (WTTC), international tourism spending is expected to hit a record $2.1 trillion in 2025, surpassing the previous high of $1.9 trillion reached in 2019 by $164 billion. Popular tourist destinations are seeing strong growth in visitor numbers, with Turkey, for example, recording a record-breaking 26.39 million visitors in the first half of the year. Similarly, Cyprus experienced a 27.2% increase in tourism revenues, reaching €955.8 million during the first five months.

These increases in international travel are a boon for travel retailers, particularly those operating in the duty-free space. Dubai Duty Free, for example, reported its best-ever sales performance in July, reaching $175 million—an impressive 9.7% increase compared to the same month last year. Liquor sales, though still a major category, saw a modest rise of 1.7%, while other product categories such as gold (+15.5%) and confectionery (+57%) recorded even stronger growth.

Dubai’s growing status as a global travel hub, especially with its increasing number of affluent Indian travelers passing through, makes it an increasingly important market for international drinks brands. A notable example is Piccadily Agro Industries, which has recently launched two exclusive expressions of its Indri single malt whisky with Dubai Duty Free. Priced around $150 each, these limited-edition releases—one matured in a Sauternes Cask (only 210 bottles available) and the other in an Oloroso Sherry Cask (348 bottles)—are a reflection of the region’s rising demand for premium spirits.

However, not all tourism markets are experiencing growth. The United States, for instance, is grappling with the effects of past policy decisions, particularly under the previous administration, which continue to impact the tourism industry. International overnight arrivals to the US dropped by 3.4% in June, with land and air arrivals from Canada experiencing a more significant decline of 28%. This downturn has placed considerable strain on Canadian duty-free retailers, especially those along the US-Canada border.

Despite these challenges, the US remains a key focus for major multinational drinks companies. In July, The Macallan, a renowned Scotch whisky brand, opened a new boutique at Los Angeles International Airport (LAX). The 92-square-meter store, located in the Tom Bradley International Terminal (TBIT) alongside luxury brands like Gucci and Burberry, is part of The Macallan’s expanding global airport network. This new store features a design inspired by the brand’s “Nurtured by Nature” retail concept, incorporating natural elements such as wood and copper, which reflect the distillery’s commitment to quality craftsmanship.

The boutique also showcases an exclusive selection of rare and premium expressions, including the travel retail-exclusive Colour Collection, The Macallan M Collection, and limited-edition offerings like the 73-year-old “Tales of The Macallan Vol 2,” a tribute to the brand’s founder. Given the upcoming sporting events, such as the 2026 FIFA World Cup and the 2028 Summer Olympics, which will be hosted in the US, the new store at LAX is poised to benefit from a potential increase in passenger traffic. However, the airport has seen a downturn in foot traffic, with a 5.46% drop in passenger numbers during the first half of the year.

In response to the growing demand for high-quality spirits in the US, HMS Host, a leading global food and beverage specialist, has launched an exceptional new spirits program. The Connoisseur’s Collection, available across nearly 50 airport bars and restaurants, offers travelers an exclusive selection of rare and premium spirits. Curated to provide an elevated experience, the collection includes iconic brands like The Balvenie 21, El Tesoro Extra Añejo tequila, and Belvedere 10, along with over 50 private-label barrels of bourbon from Jefferson’s and Maker’s Mark. Expert mixologists are on hand to guide customers through the tasting process, enhancing the experience and further solidifying the program’s premium positioning.

The rise of experiential travel is another significant trend driving the travel retail drinks sector. As consumers seek deeper, more meaningful experiences, there is growing demand for exclusive, high-end offerings at airports and other travel hubs. In response, the drinks industry is getting creative, offering curated tasting experiences and rare, limited-edition products that cater to a more sophisticated and discerning customer base.

From boutique openings in Los Angeles to curated tastings at US airport bars and exclusive whisky releases in Dubai, the travel retail drinks market continues to evolve. Despite the numerous challenges faced by the global tourism sector, the demand for premium, high-quality products remains strong. As travelers look for unique experiences and seek to indulge in luxury at every touchpoint of their journey, the travel retail drinks industry is adapting to meet their needs, ensuring its continued relevance in a rapidly changing global landscape. The combination of resilience, creativity, and a focus on premium offerings positions the sector for a successful 2025, even as global uncertainties persist.

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