As the U.S. and the world face growing economic challenges, Visit California has unveiled a new forecast from Tourism Economics predicting a nearly 1 percent drop in statewide visitation in 2025, bringing the total to 268 million trips. This constitutes the first projected year-over-year decline since the pandemic effectively halted global travel.?
During a press briefing today, Caroline Beteta, president and CEO of Visit California, revealed, ¡°Due to economic and geopolitical headwinds, California's travel industry, which has shown reliable and consistent growth over decades, is now projected to contract this year. Tourism Economics anticipates overall visitation the state will decline 0.7 percent in 2025.¡± She added, ¡°I should note, the data presented today does not contemplate the U.S. economy falling into a recession. If one were to occur, we'd be seeing even steeper declines in projections.¡±?
The anticipated decline marks a notable shift from California¡¯s long-standing pattern of steady tourism growth. In 2024, visitor spending reached an all-time high of $157.3 billion, reflecting a 3 percent increase over the previous year. Visitor spending increased in an impressive 50 of the state¡¯s 58 counties. The travel and tourism sector also saw significant job growth, adding 23,950 positions and bringing total employment to 1,165,760. Meanwhile, state and local governments collected $12.6 billion in tax revenue generated by tourism.
The historic Santa Cruz Beach Boardwalk amusement park. (Photo via Visit California, credit: Carol Highsmith) (Photo Credit: Visit California and Carol Highsmith)
International travelers specifically contributed $26.2 billion to California¡¯s economy in 2024, marking a 16.4 percent jump from the year before. However, projections for 2025 suggest a 9.2 percent drop in overseas visits, driven by factors such as declining consumer sentiment, reduced flight availability from key global markets and a strong U.S. dollar that increases travel costs for foreign visitors.
Despite current obstacles, California continues to hold its position as the top travel destination in the United States. Visit California¡¯s long-term investment in building a strong global brand continues to resonate with international audiences, many of whom feel a deep connection to the Golden State. Even as global attitudes toward U.S. travel deteriorate, California¡¯s unique identity helps set it apart somewhat from the broader national image.
¡°California tourism is a cornerstone of what is now the world¡¯s fourth-largest economy, and the industry has proven its resilience time and again,¡± explained Beteta. ¡°Despite pressures, especially on international visitation, Visit California remains optimistic about the state's long-term global brand strength and is focused on supporting the businesses and communities that will drive our industry forward.¡±
Newport Beach, California hosts a jazz festival in February of this year and a film festival in April-May. (Photo Credit: Visit California)
Although international travel faces setbacks, domestic tourism is the source of most of the Golden State¡¯s travel spending, accounting for over 80 percent. Visit California actually dedicates 79 percent of its marketing resources to the U.S. market. In 2024 alone, those efforts drove an additional $27 billion in visitor spending.
California¡¯s 40 million residents play a vital role in the state¡¯s tourism economy. Visit California is encouraging locals to vacation within the state this year, noting that choosing in-state travel in 2025 can support small businesses, stimulate local economies and help maintain California¡¯s edge as a top travel destination.
¡°Californians can make a real impact by exploring our own backyard,¡± Beteta said. ¡°Every local getaway helps sustain jobs, boost regional businesses and ensure California¡¯s diverse destinations continue to thrive.¡±
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